Vol. 101 No. 37 April 17, 2020 Inside this Issue Market Overview Price Support Spot Quotation ICE Futures A Index Southeastern Textile Mill Report South Central Southwestern Western Loan Rate Differentials Cotton & Wool Pima Quotations Cotton and Tobacco Program Cotton Market News Division 3275 Appling Road Memphis, TN 38133 901.384.3016 Average spot quotations were 30 points lower than the previous week, according to the USDA, Agricultural Marketing Service’s Cotton and Tobacco Program. Quotations for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, and uniformity 81.0-81.9) in the seven designated markets averaged 47.55 cents per pound for the week ending Thursday, April 16, 2020. The weekly average was down from 47.85 last week and from 72.61 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 47.37 cents Tuesday, April 14 to a high of 47.65 cents Thursday, April 16. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 16 totaled 22,698 bales. This compares to 8,603 reported last week and 27,298 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,407,747 bales compared to 1,100,173 bales the corresponding week a year ago. The ICE May settlement price ended the week at 52.79 cents, compared to 54.37 cents last week. Mp_cn812 Weekly Cotton Market Review Cotton Market Reports Subscribe to this report Source: USDA, AMS, Cotton and Tobacco Program, 1/ Cotlook Subscribe to all Cotton Market reports
Transcript
Vol. 101 No. 37
April 17, 2020
Inside this Issue
Market Overview
Price Support
Spot Quotation
ICE Futures
A Index
Southeastern
Textile Mill Report
South Central
Southwestern
Western
Loan Rate Differentials
Cotton & Wool
Pima Quotations
Cotton and Tobacco Program Cotton Market News Division 3275 Appling Road Memphis, TN 38133 901.384.3016
Average spot quotations were 30 points lower than the previous week, according to the USDA, Agricultural Marketing Service’s Cotton and Tobacco Program. Quotations for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, and uniformity 81.0-81.9) in the seven designated markets averaged 47.55 cents per pound for the week ending Thursday, April 16, 2020. The weekly average was down from 47.85 last week and from 72.61 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 47.37 cents Tuesday, April 14 to a high of 47.65 cents Thursday, April 16. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 16 totaled 22,698 bales. This compares to 8,603 reported last week and 27,298 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,407,747 bales compared to 1,100,173 bales the corresponding week a year ago. The ICE May settlement price ended the week at 52.79 cents, compared to 54.37 cents last week.
Mp_cn812 Weekly Cotton Market Review
Cotton Market Reports
Subscribe to this report
Source: USDA, AMS, Cotton and Tobacco Program, 1/ Cotlook
Spot cotton trading was slow. Supplies and producer offerings were moderate. Demand was light. Average local spot prices were steady. Trading of CCC-loan equities was inactive. No forward contracting was reported. Producers considered spring planting options as the COVID-19 pandemic continues to negatively impact economic activity. Sunny to cloudy conditions were observed across the lower Southeastern region during the period. Daytime high temperatures varied from the mid-60s to low 80s. Widespread storm systems moved across Alabama, Florida, and Georgia early in the week. Rainfall totals measured from trace amounts to around one and one-quarter inches of moisture, with locally heavier accumulations observed in some areas. Producers were preparing fields for spring planting; burn down applications and fertilizer were being applied. Some fields remained inaccessible due to wet conditions. Due to low cotton market prices, producers were carefully managing inputs to reduce costs. Mostly sunny to partly cloudy conditions prevailed across the upper Southeastern region throughout the period. Daytime high temperatures varied from the upper 50s to low 80s. Scattered thunderstorms brought light to moderate moisture to
areas throughout South Carolina and eastern North Carolina early in the week. Weekly accumulated rainfall totals measured from around trace amounts to around one inch of moisture. Field preparations were underway and producers applied fertilizer, lime and burn downs. Producers were carefully managing inputs to reduce costs due to low cotton market prices.
Textile Mill
Inquiries from domestic mill buyers were very light. No sales were reported. The undertone from mill buyers remained very cautious as they continued to delay or reschedule deliveries of raw cotton due to declining demand associated the COVID-19 virus. Some mills furloughed employees and closed plants last week and this week as they assessed drastically reduced demand. A few mills planned to re-open plants on week-by-week basis if yarn orders supported production. One mill announced a permanent plant closure in Landis, North Carolina effective April 24. Demand through export channels was light. Agents throughout the Far East inquired for any discounted styles of cotton. No sales were reported.
Trading
A moderate volume of color mostly 41, leaf 2-4, staple mostly 36 and 37, mike 43-49, strength 28-32, and uniformity 80-84 sold for around 25 points off ICE July futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
A light volume of 2018-crop CCC-catalog cotton, color 62 and better, leaf mostly 6 and better, staple 34 and longer, mike 43-49, strength mostly 25-27, uniformity 79-81, and containing 75 percent extraneous matter sold for 10.00 to 20.00 cents per pound, FOB warehouse (compression charges not paid).
Southeastern Markets Regional Summary Danny Pino Macon, GA [email protected]
Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was light. Average local spot prices were weak. Trading of CCC-loan equities was light. No forward contracting was reported. A light volume of CCC-catalog cotton was sold. The World Agricultural Supply and Demand report projected that carryover worldwide could be slightly more that 91 million bales, an increase of nearly 8 million bales compared to last month.
Severe weather moved through the region early in the week. Strong winds caused power outages, downed trees, and damaged structures in southern Arkansas. Colder temperatures moved in behind the front. Daytime temperatures were in the 50s and 60s. Overnight lows were in the 30s and 40s. Rainfall totals measured up to 4 inches in some areas. Fieldwork and other outdoor activities were hampered due to renewed wet conditions. River flood warnings issued by the National Weather Service remained in effect for numerous locations throughout the region. Low-lying portions of fields in bottomland remained saturated or flooded throughout the region.
South Delta
Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was light. Average local spot prices were weak. Trading of CCC-loan equities was inactive. No forward contracting was reported. A light volume of CCC-catalog cotton was sold.
Severe weather produced a tornado that caused extensive damage in Monroe, Louisiana. Downed trees, damaged homes and businesses, and extensive power outages were reported. Daytime temperatures were in the 60s and 70s, with lows in the 40s and 50s. Up to 4 inches of precipitation were reported in some areas, while most places received around 2 inches. River flood warnings issued by the National Weather Service remained in effect for numerous locations throughout the region. Low-lying portions of fields along streams and rivers remained flooded or saturated in many areas. Outdoor activities were delayed due to soft soils. Planting continued in fields that were firm enough to support equipment. According to the National Agricultural Statistics Service Crop Progress report released on April 13, cotton planting was underway at 6 percent completed in Louisiana and 1 percent Mississippi.
South Central Markets Regional Summary Jeff Carnahan Memphis, TN [email protected]
Trading
North Delta
A light volume of 2018-crop CCC-catalog cotton, mixed lots with mostly color 41 and better, leaf 4 and better, staple 36 and longer, mike averaging 48.0, strength averaging 29.6, and uniformity averaging 81.8 sold for 10.00 cents per pound, FOB warehouse (compression charges not paid).
South Delta
A moderate volume of 2018-crop CCC-catalog cotton, in mixed lots with mostly color 31 and better, leaf 3 and better, staple 38 and longer, mike averaging 4.7, strength averaging 29.7, and uniformity averaging 81.2 sold for 47.00 cents per pound, FOB warehouse (compression charges not paid).
A light volume of CCC-catalog cotton, in mixed lots with mostly color 41 and better, leaf 4 and better, staple 36 and longer, mike averaging 48.0, strength averaging 29.6, and uniformity averaging 81.8 sold for 10.00 cents, same terms as above.
Southwestern Markets Regional Summary Jane Byers-Angle Lubbock, TX [email protected]
Trading
East Texas In Oklahoma, a light volume of mostly color 31, leaf 3 and 4, staple 38, mike 36-41, strength 28-33, and
uniformity 77-82 sold for around 52.00 cents per pound, FOB car/truck (compression charges not paid). A light volume of 2018-crop CCC-catalog cotton, mixed lots with mostly color 22, leaf 2, staple 36 and
longer, mike averaging 45.6, strength averaging 29.5, and uniformity averaging 80.5 sold for around 38.50 cents per pound, FOB warehouse (compression charges not paid).
West Texas
A light volume containing mostly color 21 and better, leaf 1 and 2, staple 34 and longer, mike 38-47, strength 26-31, and uniformity 77-81 sold for around 46.50 cents per pound, FOB car/truck (compression charges not paid).
A light volume of mostly color 31 and 32, leaf 2 and 3, staple 32 and longer, mike averaging 43.9, strength averaging 27.5, and uniformity averaging 79.1 sold for around 41.75 cents, same terms as above.
Bids of 36.00 to 54.00 cents per pound, same terms as above were made on a heavy volume of 2019-crop cotton, color 23 and better, leaf 5 and better, staple 34 and longer, mike 40-46, strength 29-31, and uniformity 79-81. No sales were reported.
A light volume of 2018-crop CCC-catalog cotton, mixed lots with mostly color 31, leaf 5, staple 36, mike averaging 47.3, strength averaging 30.4, and uniformity averaging 81.0 sold for around 10.00 cents, FOB warehouse (compression charges not paid).
East Texas
Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was light. Average local spot prices were weak. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. An open invitation to bid on a light volume of 2018-crop CCC-catalog cotton was awarded on April 13. Concerns over the COVID-19 Pandemic continued to pressure the market, and confirmed cases increased throughout the region. The final planting date for insurance expired on April 15 for Bee, Brooks, Duval, Goliad, Jim Wells, Kleberg, La Salle, Live Oak, Nueces, San Refugio, San Patricio, and Webb Counties. Planting was winding down in the Upper Coast and the Coastal Bend. In the Rio Grande Valley, some seedlings were blown out of the ground during periods of gusty winds, and replanting was expected. Pinhead squares were observed in other fields by industry experts. Timely rainfall brought up to one-half of an inch of moisture in south Texas that greatly helped support the emerging stands. More rainfall is needed to take the crop to harvest, but any rainfall is beneficial. In the Blackland Prairies, thunderstorms brought rainfall, hail, and damaging straight line winds that further delayed planting. In
Kansas, fieldwork and other outside activities made good progress under cold weather conditions. Planting seed deliveries to producers were slowed due to COVID-19 stay at home orders. In Oklahoma, soils were wet and cool from recent snow and rainfall. Field preparation was idle. Cover crops had been terminated ahead of the wintry weather.
West Texas
Spot cotton trading was moderate. Supplies were moderate. Producer offerings were light. Demand was light. Average local spot prices were weak. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. The COVID-19 Pandemic continued to pressure the market and cause delays in shipments. Producers planned for cotton planting by ordering seed and building rows. Ground was plowed and herbicide was applied. Fieldwork progressed despite erratic weather conditions. Beneficial rainfall was received early in the period and up to 5 inches of snow was received in the Panhandle on April 14. Warm, sunny conditions made up the other days, with daytime temperature highs in the low 40s to low 80s and overnight lows in the 30s to 50s.
Desert Southwest (DSW) Spot cotton trading was inactive. Supplies were moderate. Producers moved bales into the CCC-loan program. Some producers offered a light volume of equities, mostly for price discovery. No sales were reported. Demand was light. The COVID-19 pandemic continued to put pressure on the Upland futures market and demand. Average local spot prices were weak. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Plenty of sunshine and warm conditions initiated planting in central Arizona and in Safford. The Yuma crop made good progress. Temperatures in the mid-70s to low 80s advanced fieldwork and planting in New Mexico and El Paso, Texas. Some El Paso and Hudspeth County, Texas producers began planting last week. Planting gained momentum as weather and soil conditions were conducive to good germination. Pre-plant irrigation continued in New Mexico and the upper Valley of El Paso. Sources reported some producers were still determining whether to increase Upland acreage from American Pima acreage, as prices and demand have fallen flat.
San Joaquin Valley (SJV) Spot cotton trading was inactive. Supplies and demand were light. The COVID-19 pandemic continued to impact U.S. and global economies. Average local spot prices were weak. No forward contracting or domestic mill activity was reported.
Foreign mill inquiries were light. Temperatures rebounded into the mid-70s and low 80s for the week. Above-average daily temperatures were recorded in the Valley late in the period. Producers were anxious to get cottonseed in the ground as planting deadlines for late maturing varieties approached. It remains uncertain how much Upland will actually be planted.
American Pima (AP)
Spot cotton trading was inactive. Supplies of 2019 crop cotton were moderate. Producers moved bales into the CCC-loan program. Demand was light. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. The COVID-19 pandemic continues to affect demand for cotton. Foreign mill inquiries were light for 2019 and 2020-crop. Shippers remained focused on shipping cotton and preserving previously made sales contracts. The Foreign Agricultural Service Export Sales report for week ending April 9 showed no new sales and reported no cancellations. Temperatures were in the 50s to 80s in the far west. No rainfall was reported for the region. Planting windows were pushed into April for the San Joaquin Valley (SJV) of California, due to spring cold fronts. SJV producers would prefer to have had AP in the ground in March, as AP varieties need a long growing season. Initial planting began in Safford, Arizona, El Paso, Texas, and the SJV. Total AP plantings remain uncertain as demand from textile mills and retailers has come to a standstill.
Western Markets Regional Summary Maria Townsend Visalia, CA [email protected]
USDA’s Commodity Credit Corporation announced the 2020 crop loan rate differentials for upland and extra-long staple cotton on April 16. The differentials, also referred to as loan rate premiums and discounts, have been calculated based on market valuations of various cotton quality factors for the prior three years. This cal-culation procedure is identical to that used in past years. The 2020 crop differential schedules are applied to 2020 crop loan rates of 52 cents per pound for the base grade of upland cotton and 95 cents per pound for extra-long staple cotton. The 2018 Farm Bill stipulates that the loan rate for the base quality of upland cotton range between 45 and 52 cents per pound based on the sim-ple average of the Adjusted World Price for the two marketing years immediately preceding the next planting of the crop. However, the loan rate established cannot be less than 98 percent of the loan rate for the immedi-ately preceding year. The loan rate provided to an individual cotton bale is based on its quality as determined by USDA’s Agricultural Marketing Service classing measurements. The Commodity Credit Corporation adjusts cotton loan rates by these differentials so that cotton loan val-ues reflect the differences in market prices for color, staple length, leaf, extraneous matter, micronaire, length uniformity and strength. Click here to view the 2020-loan rate differentials.
Total 8,249,861 11,606,762 8,176,043 5,467,183 71,239 0 2,579 6,139,579
PIMA 2018 2019 2018 2019 2018 2019 2018 2019
AZ 19,800 8,399 19,800 622 0 0 0 7,777
CA 365,717 391,239 365,717 123,582 0 0 0 267,657
NM 7,734 6,271 7,734 4,259 0 0 0 2,012
TX 30,966 16,607 30,966 9,015 0 0 0 7,592
Total 424,217 422,516 424,217 137,478 0 0 0 285,038
Bales Put Under Loan Bales Repaid/Liquidated Bales Delivered to CCC Bales Outstanding
Source: Farm Service Agency
Warehouse Cotton Loan Quantities as of March 31, 2020 Warehouse Cotton Loan Quantities as of March 31, 2020
Source: Farm Service Agency
8
Cotton & Wool
For complete report click here.
In April, the 2019/20 world cotton mill use estimate was reduced nearly 7.6 million bales (6.4 percent) - a record monthly change - as cotton sector disruptions from COVID-19 affect the supply chain from spinning to retail (fig. 1). Global mill use is now forecast at 110.6 million bales, 8 percent below 2018/19 and the lowest in 6 years. The reduction has also impacted raw cotton fiber demand at spinning mills, with the world trade estimate lowered 3.0 million bales (6.8 percent) this month as a result. Global cotton trade is now forecast slightly below 2018/19 at 40.6 million bales, the lowest in 3 years. While mill use and trade adjustments were made for most countries in April, the United States - the leading exporter - experienced one of the largest monthly reductions in projected U.S. cotton exports on record.
The following information was excerpted from the Cotton & Wool Outlook report, released on April 13, 2020
