Weekly Cotton Market Review
February 15, 2013
Average spot cotton quotations were virtually unchanged from than the previous week, according to the USDA, Agricultural Marketing Service’s Cotton 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, uniformity 81.0-81.9) in the seven designated markets averaged 76.52 cents per pound for the week ended Thursday, February 14, 2013. The weekly average was down slightly from 76.36 cents last week, and from 84.83 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 77.44 cents on Monday, February 11 to a low of
75.37 cents on Wednesday, February 13. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended February 14 totaled 18,018 bales. This compares to 37,068 bales last week and 24,468 bales reported a year ago. Total spot transactions for the season were 1,435,279 bales, compared to 657,315 bales the corresponding week a year ago. The ICE March settlement prices ended the week at 81.02 cents, compared to 81.72 cents last week.
Prices are in effect from February 15-21, 2013
Adjustment World Price (AWP) 68.81 ELS Competitiveness Payment 0.00
Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2011 Crop 0.94
Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2012 Crop 1.14
Source: Farm Service Agency, FSA, USDA
USDA ANNOUNCES SPECIAL IMPORT QUOTA #1 FOR UPLAND COTTON February 14, 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 February 21, 2013 allowing importation of 14,776,787 kilograms (67,869 bales) of upland cotton. Quota number 1 will be established as of February 21, 2013, and will apply to upland cotton purchased not later than May 21, 2013, and entered into the U.S. not later than August 19, 2013. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period August 2012 through October 2012, 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 active. Supplies were moderate. Demand was good. Producer offerings were moderate. Average local spot prices were firm. Trading of CCC-loan equities was light. Producers took advantage of higher ICE futures during the period to forward contract a moderate volume of 2013-crop cotton.
Areas across the southeastern region benefitted from consistent rainfall throughout the period. Widespread daily shower activity brought two to four inches of weekly accumulated rainfall to south Alabama, the Florida panhandle and south Georgia. Exceptional drought conditions were eradicated in Georgia, and dry conditions were significantly reduced elsewhere. Daytime temperatures were observed in the high 60s to mid-70s. Similar weather prevailed in the Carolinas, and the wet weather also helped reduce droughty conditions in this region. Clear conditions forecast in the near term should help soft soils to firm and allow fieldwork to resume. Producers considered planting options and attended local production meetings.
South Central Markets
Spot cotton trading was slow. Producer offerings were moderate. Demand was good. Average local spot prices were steady. Trading of CCC-loan equities was inactive. No forward contracting was reported. Seasonably, cool daytime temperatures in the low to mid-50s were observed during most of the period. Day-to-day scattered shower activity brought around one to one and one-half inches of weekly accumulated moisture to cotton growing areas throughout Arkansas, Tennessee, and the boot heel of Missouri. Additional moisture was needed throughout western Arkansas, where moderate to severe drought conditions persisted. No outside activities were reported. Producers attended crop production meetings and considered planting options for the 2013 crop year.
Spot cotton trading was slow. Producer offerings were light. Demand was light. Average local spot prices were steady. Trading of CCC-loan equities was inactive. No forward contracting was reported. A storm system brought heavy rainfall to areas across northern Louisiana and the Mississippi Delta early in the week. Rainfall accumulations totaled two to four inches and flood warnings were issued in many areas. No fieldwork was reported as soils remained soggy. A period of clear and warmer conditions was forecast in the near term. Producers attended production meetings.
Spot cotton trading was slow. Supplies were light. Demand was very light. Average local spot prices were steady. Producer offerings were light. No forward contracting was reported. Trading of CCC-loan equities was slow. Foreign mill inquiries were light. Interest was best from Indonesia, Mexico, and Turkey. In Texas, light rains dampened soils around Corpus Christi, but heavier rains were received in Victoria and north into the Blackland Prairies. Producers prepared for planting at the end of the month in south Texas. Planting officially began February 1 in the Rio Grande Valley, but most producers minimized cold-weather risks, and opted to plant in March during warmer conditions. In Kansas, a winter storm deposited intermittent traces of rain and snow in the southern part of the state. Some producers considered applying lime to maintain proper soil pH in no-till fields where needed. Fertilizer applications were active. Ginning continued in Kansas. In Oklahoma, one-half to six inches of snow was received that will help alleviate droughty conditions. Some areas received one-quarter to one inch of beneficial rainfall. Ginning continued in Oklahoma.
Spot cotton trading was slow. Supplies were light. Demand was light. Average local spot prices were steady. Producer offerings were light. No forward contracting was reported. Trading of CCC-loan equities was slow. Foreign mill inquiries were light. Interest was best from Indonesia, Mexico, and Turkey.
Inclement weather interrupted field preparations with one to five inches of snow deposited in the Northern High Plains early in the week. The Plains received general light rains and snow flurries that were quickly absorbed into the parched soils. Fieldwork was active before and after the winter storm events. Producers turned the soil and built rows. Herbicide and fertilizer was applied in some fields. Some irrigated fields were pre-watered. Industry member attended meetings.
Desert Southwest (DSW)
Spot cotton trading was inactive. Supplies and demand were moderate. Average local spot prices were steady. Foreign mill inquiries were light. No forward contracting or domestic mill activity was reported.
Temperatures were in the 60s in Arizona. Fieldwork increased as producers prepared for spring plantings. Producers began pre-irrigating fields in Yuma, Arizona. A few central Arizona gins continued pressing operations. Mild temperatures in the mid-to-high 60s were the norm for cotton-growing areas of New Mexico and El Paso, Texas. According to the U.S. Drought monitor, the region continued to suffer in moderate-to-severe drought conditions. Local contacts were in general agreement with the reported planting intentions released by National Cotton Council for Arizona and New Mexico.
San Joaquin Valley (SJV)
Spot cotton trading was inactive. Supplies and demand were moderate. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.
A cold front brought scattered showers and hail to the Central Valley early in the period. Several locales received just over one-half of an inch of rainfall. Temperatures were in the mid-60s by mid-week. Producers began pre-irrigating fields and spraying herbicide for weed control. Industry representatives were supportive of the reported planting intentions released by the National Cotton Council. Lack of snowpack and available irrigation water remained a concern. Ginning continued.
American Pima (AP)
Spot cotton trading was slow. Supplies and demand were moderate. Average local prices were higher. Crop contracts for 2013 were offered at around 130.00 cents per pound, but no contracts were signed. No domestic mill activity was reported.
Ginning continued in the San Joaquin Valley. Spring fieldwork preparations were underway in the far west. Pre-irrigating and herbicide control was the most prevalent. Below-average reservoir levels and competing crops are on-going considerations for far west producers. Some producers were waiting to hear from irrigation districts about water allotments and deliveries. The on-going drought will definitely affect planting intentions for the region.
Textile Mill Report
Domestic mill buyers purchased a moderate volume of color 53 and better, leaf 5, and staple 33 and longer for nearby delivery. Mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 for third and fourth quarter delivery. Most mills operated on a three to seven day schedule. Demand for denim had increased slightly, but was moderate at best. Finished product demand was sluggish due to lackluster retail sales activity. Load out dates at some warehouses were reported at eight weeks, with some locations reporting no available load out dates until May.
Inquiries through export channels were moderate, and domestic exporters reported demand had tapered due to higher ICE futures during the period. Demand was best throughout the Far East for any discounted or low -grade styles of raw cotton.
.. A heavy volume mixed lot containing color mostly 11 and 21, leaf 3 and better, staple 35-38, mike 37 -49, strength 27-29, and uniformity 80-82 sold for around 50 points on ICE May futures, FOB car/ truck (Rule 5, compression charges paid).
.. A moderate volume of color 21-41, leaf 4 and better, staple 33 and longer, mike 37-49, strength 2629, and uniformity 80-82 sold for 275 to 325 points off ICE May futures, same terms as above.
.. A moderate volume of color mostly 31 and 41, leaf 4 and 5, staple 35-37, mike 43-49, strength 27-30, and uniformity 80-82 sold for around 300 points off ICE May futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
.. Mixed lots containing color mostly 41 and 51, leaf 3-5, staple 33-36, mike 37-49, strength 27-29, uniformity 80-82, and containing approximately 25 percent bark sold for around 625 points off ICE May futures, same terms as above.
.. A very light volume of 2011-crop cotton, color 52 and 63, leaf 4-6, staple 34-36, mike 37-49, strength 26-28, and uniformity 79-81 sold for around 65.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
.. A light volume of color mostly 31 and 41, leaf 2-4, staple 34, mike 50 and higher, strength 28-30, and uniformity 79-81 sold for around 76.25 cents per pound, FOB car/truck (Rule 5, compression charges paid).
.. In Oklahoma, a moderate volume of color 21 and better, leaf 2 and better, staple 37 and longer, mike 42-50, strength 29-32, and uniformity 79-83 sold for around 81.00 cents per pound, FOB car/truck (compression charges not paid).
.. A light volume of color 21, leaf 3, staple 34 and longer, mike 37-42, strength 28-31, and uniformity 77-80 sold for around 73.00 cents, same terms as above.
.. A light volume of color 21, leaf 2 and 3, staple 33 and longer, mike 46-48, strength 27-31, and uniformity 79-81 sold for around 71.00 cents, same terms as above.
.. A light volume of CCC-loan equities traded for 15.00 to 19.00 cents.
.. A light volume of color mostly 21 and better, leaf 2, staple 35 and longer, mike 38-43, strength 2931, and uniformity 78-81 sold for around 78.00 cents per pound, FOB car/truck (compression charges not paid).
.. A light volume of color 21 and better, leaf 3 and better, staple 35 and longer, mike 40-47, strength 28 -31, and uniformity 79-80 sold for around 74.50 cents, same terms as above.
.. A moderate volume of mixed lots containing color 21 and better, leaf 2 and better, staple 33 and longer, mike 29-49, strength 25-32, uniformity 76-81, and 50 percent bark sold for around 70.75 cents, same terms as above.
.. A light volume of CCC-loan equities traded for 15.00 to 19.00 cents.
.. No trading activity was reported.
San Joaquin Valley
.. No trading activity was reported.
.. A moderate volume of San Joaquin Valley Pima, color 2 and better, leaf 2 and better, and staple 48 and longer traded for around 125.00 cents per pound, UD free, FOB warehouse.
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