Weekly Cotton Market Review
August 2, 2013
Prices are in effect from August 2-8, 2013
Adjustment World Price (AWP) 71.29 ELS Competitiveness Payment 0.00
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2012 Crop 0.51
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2013 Crop 0.66
Source: Farm Service Agency, FSA, USDA
USDA ANNOUNCES SPECIAL IMPORT QUOTA #25
FOR UPLAND COTTON
August 1, 2013
The Department of Agriculture's Commodity Credit Corporation announced a special import quota for upland cotton that permits importation of a quantity of upland cotton equal to one week’s domestic mill use. The quota will be established on August 8, 2013 allowing importation of 13,544,062 kilograms (62,207 bales) of upland cotton. Quota number 25 will be established as of August 8, 2013, and will apply to upland cotton purchased not later than November 5, 2013, and entered into the U.S. not later than February 3, 2014. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period December 2012 through February 2013, the most recent three months for which data are available. Future quotas, in addition to the quantity announced, will be established if price conditions warrant.
Spot cotton trading was slow. Supplies were light. Demand was good. Producer offerings were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive.
Partly cloudy conditions prevailed across the region with daytime temperatures in the upper 80s to lower 90s. Light scattered precipitation was received throughout Alabama, the Florida panhandle, and Georgia. Daily precipitation totaled trace amounts to around one-quarter of an inch in most areas. Reports indicated later planted fields were suffering from low vigor due to the unseasonably cool conditions and excessive moisture experienced during the summer. Soggy conditions persisted in many areas and some fields were drowned out. Producers managed fields with growth regulators and applied fungicides to control leaf spot diseases on land firm enough to support field equipment. A period of hot and sunny weather is needed to allow soft soils to firm and invigorate the crop. A drier weather pattern was experienced this week in the Carolinas and Virginia. The crop made good progress. Plant and stink bug pressure was building in most areas and some fields required multiple treatments. Squaring neared completion throughout the region and boll setting was underway.
South Central Markets
Spot cotton trading was inactive. Supplies were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was slow. No forward contracting was reported.
Cloudy conditions prevailed during the period with daytime temperatures in the mid-80s to low 90s. Light precipitation from scattered thunderstorms was received. The crop progressed well under the warm and mostly dry weather, but was still reported at 7 to 10 days behind in most areas due to unseasonably cool growing conditions. According to the National Agricultural Statistical Service, boll setting neared completion in Arkansas at 94 percent, and advanced in Missouri to 41 percent, and 20 percent in Tennessee. Producers applied plant growth regulators and insecticides to control heavy pressure from plant bugs.
Spot cotton trading was inactive. Supplies were light. Producer offerings were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Scattered showers brought around one inch of moisture to most areas over the weekend. The crop progressed well under mostly dry conditions the remainder of the week with daytime temperatures in the low to mid-90s. Producers applied growth regulators and sprayed fields for infestations of plant and stink bugs. According to National Agricultural Statistical Service, boll setting advanced to 80 percent in Louisiana and 52 percent in Mississippi.
Spot cotton trading was inactive. Supplies were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Harvesting expanded and ginning began in the Rio Grande Valley. Harvest aids were applied to some fields to prepare for harvest. The Corpus Christi Classing Office classed the first samples of the 2013season. Variability in the crop existed as bolls began to pop open on later planted fields. Some producers spot treated for the Verde plant bug. The Upper Coast and Winter Garden areas are expected to begin ginning around mid-August. In East Texas, the cotton is blooming, but heat stress caused some fruit shedding. Recent rainfall has helped the top bolls to mature. Experts expect defoliation to begin in about three weeks. Some fields were treated for stink bug infestations. The crop in Kansas made steady progress with beneficial rainfall. Full-bloom was reached in some fields. Producers applied plant growth regulators where needed. The crop was rated mostly fair to good, according to the National Agricultural Statistics Service (NASS). In Oklahoma, some fields entered cut-out early and began to bloom from the top, as a result of excessive heat and drought. Some wells in the southwestern counties stopped pumping because the ground water was exhausted. The irrigated crop progressed; statewide, 67 percent had squared and 23 percent had set bolls according to NASS.
Spot cotton trading was inactive. Supplies were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Isolated showers deposited one to two inches of beneficial rainfall on some fields. The crop continued to advance with some fields setting bolls and others reaching cutout. Fruit retention was excellent. Most plants were at or near peak water use. Irrigation was underway. Insect populations were light and easily controlled.
Desert Southwest (DSW)
Spot cotton trading was inactive. Supplies were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive.
The crop is ahead of schedule in Yuma, Arizona and local reports indicated that some producers applied final irrigations. Recent rainfall was beneficial and helped increase yield potential in central Arizona. Lygus and mites were monitored and treated as needed. The crop condition was rated mostly good to excellent, and 94 percent of the fields had squared according to the National Agricultural Statistics Service. Some bolls had begun to open on the lower part of the plants. A weekend storm brought hail to fields around El Paso and Las Cruces. Damage was minimal and reports indicated that plants appeared to be recovering. The rainfall helped most fields advance and increase boll load. Some fields reached cut-out, while others continued to bloom.
San Joaquin Valley (SJV)
Spot cotton trading was inactive. Supplies were light. Demand was light. Average local spot prices were lower. No forward contracting or domestic mill activity was reported.
The crop progressed under warm temperatures and established a foundation for a good boll load. Insect pressure was light and easily controlled. Irrigation was underway. Reports indicated that most fields were about two weeks ahead of schedule. Producers prepared for an early harvesting season.
American Pima (AP)
Spot cotton trading was inactive. Supplies were light. Demand was light. Average local prices were steady. No forward contracting was reported. No domestic or foreign mill activity was reported.
Fields in Arizona were rated at mostly good to excellent by the National Agricultural Statistics Service. Recent rainfall helped to progress the crop and irrigation continued. Local reports in Yuma, Arizona indicated that the crop was slightly ahead of schedule and some producers applied final irrigation. In California, the crop progressed under warm temperatures and had established a foundation for a good boll load. Irrigation continued. Reports indicated that most fields were about two weeks ahead of schedule. Fields around Las Cruces, New Mexico and El Paso, Texas suffered minor hail damage over the weekend. Loss was minimal and the fields appeared to have recovered with no abandoned acres reported. Recent rainfall helped to advance the crop.
Textile Mill Report
Domestic mill buyers inquired for a moderate volume of 2013-crop cotton, color 31, leaf 3, and staple 36 for November/December delivery. Demand was also good for 2013-crop cotton, color 41, leaf 4, and staple 34 for first through fourth quarter 2014. No sales were reported. Reports indicated domestic cotton shippers were hesitant to offer a heavy volume of 2013-crop cotton for October through December delivery due to the lateness of the crop. Export demand for yarn remained good and most mills continued to operate at capacity. Demand through export channels was moderate. Agents for mills in San Salvador inquired for a moderate volume of color 31, leaf 3, and staple 35 along with USDA Green Card Class 2013-crop cotton, color 41, leaf 3 and staple 35 for February/March 2014 shipment. Representatives for mills throughout the Far East inquired for any discounted or low-grade styles of cotton.
.. A moderate volume of color mostly 31 and 41, leaf 3 and 4, staple 36-38, mike 43-52, strength 28-30, and uniformity 80-82 sold for around 175 points on ICE December futures, FOB car/truck (Rule 5, compression charges paid).
.. Mixed lots containing a moderate volume of color mostly 31 and 41, leaf 3-5, staple 34-38, mike 43-52, strength 27-30, and uniformity 80-82 sold for around 86.75 cents per pound, same terms as above.
.. A light volume of CCC-loan equities traded at around 20.50 cents per pound.
.. No trading activity was reported.
.. A light volume of CCC-loan equities traded for 25.00 to 27.25 cents per pound.
.. A light volume of color 21, leaf 3, staple 35, mike 38-44, strength 27-31, and uniformity 77-82 sold for around 80.00 cents per pound, FOB car/truck, (compression charges not paid).
.. A light volume of mixed lots containing color 21 and better, leaf 3 and better, staple 32 and longer, mike averaging 34.4, strength averaging 27.9, uniformity averaging 78.2, and 75 percent bark sold for around 76.00 cents, same terms as above.
.. No trading activity was reported.
San Joaquin Valley
.. No trading activity was reported.
.. No trading activity was reported.
Upland cotton growers in the United States had booked about 12 percent of their expected acreage by the end of July this season. This was above the 10 percent booked through the same period last year. Contracting has been most active in the southeastern states where about 33 percent of the crop was under contract by the end of July and compares with 13 percent a year earlier. South central states’ growers had forward contracted about 15 percent, compared with 30 percent in 2012. Growers in the western states had 3 percent of the crop under contract compared to 4 percent last year. Southwestern states’ growers had contracted about 2 percent of the crop compared to 4 percent at the end of July last year. These estimates were based on the National Agricultural Statistics Board's June Acreage report and informal surveys made by the USDA, Agricultural Marketing Service, Cotton Program.
Weekly Cotton Review