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Weekly Cotton Market Review, narrative

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 Mp_cn812 
July 31, 2020 
Weekly Cotton Market Review 
 
 


Spot quotations averaged 145 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 56.73 cents per pound for the week ending Thursday, July 30, 2020. The 
weekly average was down from 58.18 last week and from 57.75 cents reported the 
corresponding period a year ago. Daily average quotations ranged from a low of 
55.67 cents Friday, July 24 to a high of 58.53 cents Thursday, July 30. Spot 
transactions reported in the Daily Spot Cotton Quotations for the week ended 
July 30 totaled 17,733 bales. This compares to 1,894 reported last week and 8,394 
spot transactions reported the corresponding week a year ago. Total spot transactions 
for the season were 1,614,229 bales. The ICE Oct settlement price ended the week at 
62.82 cents, compared to 61.68 cents last week. 


Southeastern Markets Regional Summary


Spot cotton trading was moderate. Supplies and producer offerings were moderate.  
Demand was light.  Average local spot prices were lower.  Trading of CCC-loan 
equities was moderate.  No forward contracting was reported.  The COVID-19 Pandemic 
continues to negatively affect cotton demand and disrupt supply chains.  
     
Mostly cloudy conditions dominated the weather pattern across the lower Southeastern 
region during the period.  Daytime high temperatures were in the upper 80s to low 90s.  
Widespread thundershowers brought moderate to heavy precipitation to areas throughout 
central Alabama, the Florida Panhandle, and portions of southwest Georgia. Weekly 
accumulated rainfall totals measured from 1 to 4 inches, with heavier accumulations 
received in areas throughout the Florida Panhandle. Producers welcomed the moisture 
that invigorated plants and helped the crop to advance at a rapid pace.  Blooming fields 
ramped up crop water requirements and producers continued to irrigate fields as hot 
conditions rapidly evaporated the moisture.  Producers applied plant growth regulators.  
Stink bugs were moving into cotton fields and treatments were underway in fields that met 
threshold limits.  Pressure from other cotton pests were generally light and easily 
controlled.  According to the National Agricultural Statistics Service�s (NASS) Crop 
Progress report released July 27, cotton squaring neared completion and boll-setting 
reached 63 percent completed in Georgia and 60 percent completed in Alabama. 
     
A mix of sunny to partly cloudy conditions prevailed across the upper Southeastern 
region during the period. Seasonably hot daytime high temperatures were mostly in the 
mid-to-upper 90s.  Widespread thunderstorms brought moderate precipitation to areas of 
the central and eastern Carolinas and localized areas of Virginia.  Weekly accumulated 
rainfall totals measured from 1 to 4 inches, with heavier accumulations observed in some 
areas.  Squaring and boll-setting advanced at a rapid pace and producers welcomed the 
moisture which relieved heat stressed plants. Local experts scouted fields; stink bug 
pressure was increasing and many fields met threshold limits. Bollworm moths were 
noticeably flying around blooming cotton and bollworms were present in some fields.  
According to the NASS Crop Progress report, boll-setting had reached 51 percent completed 
in North Carolina, 39 in Virginia, and 27 percent completed in South Carolina. 
 
Textile Mill 

Domestic mill buyers inquired for a light volume of 2019 and 2020-crop cotton, color 41, 
leaf 3, and staple 37 for third and fourth quarter delivery.    No sales were reported. 
Additional inquiries from domestic mill buyers were very light.  The undertone from mill 
buyers remained cautious as mills operated at reduced capacity, due to lackluster demand 
associated with the COVID-19 Pandemic.  Mills continued to produce personal protective 
equipment for frontline workers and military supplies in response to the COVID-19 Pandemic. 
     
Demand through export channels was very light.  Agents for mills throughout the Far East 
inquired for any discounted styles of cotton. 

Trading 
..
A light volume of color 41 and 51, leaf 3 and 4, staple 36 and 37, mike 43-49, strength 29-32, 
and uniformity 81-83 sold for around 750 points off ICE December futures, FOB car/truck 
(Rule 5, compression charges paid). 
..
A heavy volume 2019 CCC-loan equity traded for around 9.75 cents per pound. 


South  Central Markets Regional Summary 


North Delta 

Spot cotton trading was inactive.  Supplies of available cotton and demand were light. 
Average local spot prices were lower.  Trading of CCC-loan equities was inactive. No 
forward contracting was reported. The COVID-19 Pandemic continues to negatively impact 
the overall global economy.  The number of daily cases of the COVID-19 disease continues 
to grow, especially in the United States and Latin America. 
     
A series of thundershowers characterized the weather pattern during the week, which 
brought up to 1 inch of much needed moisture to the region. Daytime temperatures were 
mostly in the 90s, with the heat index throughout the territory over 100 degrees.  
Overnight lows were in the mid-70s.  The crop made excellent progress under good weather 
conditions.  Boll-setting advanced rapidly in most areas.  Producers were carefully monitoring 
fields for insect pests.  Some fields were treated for infestations of plant bugs, bollworms, 
and spider mites.  Weed control was a challenge in some places, in part due to the lateness 
of the crop.  Plant growth regulators were also applied as necessary to control excessive 
vegetative growth.  According to the National Agricultural Statistics Service�s Crop Progress 
report released on July 27, cotton setting bolls had reached 88 percent in Arkansas, 
22 in Missouri, and 42 percent in Tennessee.  Crop development lagged at least one week 
behind the five-year average in all areas. 
 
South Delta 

Spot cotton trading was inactive.  Supplies of available cotton and demand were light.  
Average local spot prices were lower.  Trading of CCC-loan equities was inactive. No 
forward contracting was reported. The COVID-19 Pandemic continues to negatively impact 
economic activity around the world.  The number of daily cases continues to grow, especially 
in North and South America. 
     
Typical summer weather prevailed during the week.  Daytime temperatures dropped into the 80s 
to low 90s.  Overnight lows were in the upper 70s.  A series of thundershowers brought around 
1 inch of rain to parts of the territory.  The nearby weather forecast is calling for more scattered 
showers.  The crop made excellent progress under very good growing conditions.  Local experts 
reported that    early-planted fields were approaching cut-out, while a few late planted 
fields were just beginning to bloom. Insect pressure from plant bugs and bollworms increased 
in parts of Mississippi and Louisiana; spider mites were a problem in drier areas.  Fields 
were treated as necessary to control outbreaks.  Boll shedding was reported in some places as a 
result of adverse weather conditions, but producers remained optimistic about good yields due 
to heavy fruiting.  Many fields have received several applications of plant growth regulators; 
excessive vegetative growth was reported in fields where inclement weather hindered the application 
and effectiveness of the chemicals.  According to the National Agricultural Statistics Service�s 
Crop Progress report released on July 27, boll-setting had reached 85 percent in Louisiana and 
55 percent in Mississippi.   

Trading 
  
North Delta 
..No trading activity was reported.   

South Delta 
..No trading activity was reported.   


Southwestern Markets Regional Summary      .


East Texas 

Spot cotton trading was slow.  Supplies and producer offerings were moderate. Demand was 
light. Average local spot prices were lower. Producer interest in forward contracting was 
light. Trading of CCC-loan equities was active. Foreign inquiries were light. Interest was 
best from China, Indonesia, and Pakistan.  The Loan Deficiency Payment remains in effect. 
The lack of demand and the COVID-19 Pandemic disrupted marketing infrastructure.    
     
Hurricane Hannah brought torrential downpours to the Rio Grande Valley that left cities, 
fields, and roads flooded.  Some areas received more than 15 inches of accumulated rainfall. 
Preliminary reports indicated that a significant amount of cotton fields were lost and that 
modules in the fields and on gin yards were sitting in water.  It will take weeks to determine 
the extent of the damage.  Up to 4 inches of rainfall was received in south Texas and fields 
were soggy.  Defoliant applications and harvesting was delayed. Some later planted fields in 
the Coastal Bend and Upper Coast benefitted from the rain spurred by Hurricane Hannah, according 
to local sources. Stands with opened bolls did not need the additional rain.  Stands advanced 
in the Blackland Prairies, and were setting bolls. July rainfall benefitted the crop.  
Harvesting is about 45 days away in Hill, Navarro, and Ellis counties.  
     
In Kansas, the crop advanced and received beneficial precipitation with daytime temperatures 
in the upper 70s to mid-90s. Soaking rainfall was received for multiple days that left fields 
soft. Cotton setting bolls was at 22 percent, ahead of 14 last year, and the five-year average 
of 12 percent, according to the National Agricultural Statistics Service�s (NASS) Crop Progress 
report released July 27. Cotton setting bolls in Oklahoma was at 25 percent, ahead 2 from the 
previous year, and 1 percent from the five-year average, according to NASS. Spotty rainfall 
was received.  Plant growth regulators were applied.   
 
West Texas 

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was light.  
Average local spot prices were lower.  Producer interest in forward contracting was light. 
Trading of CCC-loan equities was moderate. Foreign inquiries were light. Interest was best 
from China, Indonesia, and Pakistan. The Loan Deficiency Payment remains in effect. The COVID-19 
Pandemic restrictions continued to impact commodity markets.    
     
Irrigation water was applied with daytime temperature highs in the low to upper 90s, and overnight 
lows in the 70s. Scattered showers brought trace to more than three and one-half inches of precipitation 
to some locations.  Cooler temperatures in the evenings and rainfall brought stress relief.  
The afternoon summer rains were spotty, but beneficial for the fields that received it. Droughty 
conditions prevailed in the Panhandle as most stands neared peak bloom.  Insect pressure was light.  
Producers kept fields free of weeds.  

Trading 
 
East Texas 
..
In Kansas, a light volume of 2019-crop mostly color 31 and 41, leaf 4 and 5, staple 37 and 38, 
mike 30-32, strength 30-34, uniformity averaging 80.6, and 100 percent extraneous matter sold for 
around 48.50 cents per pound, FOB car/truck (compression charges not paid).   
..
In Oklahoma, a light volume of 2019-crop mostly color 41, leaf 3-6, staple 38 and 39, mike 44-48, 
strength 32-35, uniformity averaging 81.6, and 100 percent extraneous matter sold for around 
50.00 cents, same terms as above. 
..
A light volume of 2019-crop color 31, leaf 4 and 5, staple 37, mike 30-32, strength 30-33, and 
uniformity 79-82 sold for around 48.75 cents, same terms as above. 
..
A heavy volume of 2019-CCC-loan equities traded for 0.00 to 6.00 cents. 
 
West Texas 
..
A mixed lot of 2019-crop containing a light volume of mostly color 32 and better, leaf 2 and 3, staple 33, 
mike 41-50, strength 24-31, and uniformity 77-84 sold for around 49.25 cents per pound, 
FOB car/truck (compression charges not paid).   
..
A light volume of 2019-CCC-loan equities traded for 0.50 to 1.00 cents. 


Western Markets Regional Summary   


Desert Southwest (DSW) 

Spot cotton trading was inactive. Supplies were moderate. Demand was light. 
Average local spot prices were lower. The COVID-19 Pandemic continued to impact 
the U.S. economy and cotton demand.   With ICE December futures prices in the 
low 60 cents range, producers showed no interest in forward contracting.  
No domestic mill activity was reported. Foreign mill inquiries were light.     
     
Temperatures continued in the high 100s in western and central Arizona.   
Excessive heat watch and warnings were in effect late in the period as 
temperatures reached 115 degrees.  Heat warnings will continue through 
Saturday, August 1.  According to the U.S. Drought Monitor, abnormally                 
dry-to-severe drought conditions exist in cotton-growing areas of Arizona.  
The Yuma crop approached cut-out stage. The crop made good progress in central 
Arizona. Insect sweeps were made, and no significant issues were reported.  
Temperatures were in the high 90s in New Mexico and El Paso, TX for most of 
the week.  Temperatures reached the mid-100s late in the period.  Heat advisories 
were in effect for El Paso, TX.  Beneficial rainfall was received early in the 
period.  Precipitation amounts varied from one-quarter of an inch to one inch.   
The crop made good progress. Abnormally dry-to-moderate drought conditions were 
reported for cotton-growing areas of New Mexico, according to the U.S. Drought Monitor. 
 
San Joaquin Valley (SJV) 

Spot cotton trading was inactive.  Supplies and demand were light. Average 
local spot prices were lower. The COVID-19 Pandemic continued to impact the 
U.S. economy and cotton demand.  No forward contracting or domestic mill activity 
was reported.  Foreign mill inquiries were light.   
     
Hot, dry conditions continued. Triple-digit temperatures started on Sunday, July 26 
with temperatures in the low to mid-100s.   Local sources reported that the crop looks 
great.  Some aphid and whitefly were present, but were easily treated. Blooming continued. 
The crop made excellent progress.     
 
American Pima (AP) 

Spot cotton trading was inactive. Supplies of 2019-crop cotton were moderate.  
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 
the demand for cotton.  Foreign mill inquiries were light. Mills inquired for new-crop 
cotton, mostly for price discovery.  Shippers continued to offer 2019-crop cotton.  
Shipments continued to foreign destinations.   
     
Hot, dry conditions were reported throughout the Far West.  Monsoon rainfall was received  
in New Mexico and El Paso, TX early in the reporting period. According to the U.S. Drought 
Monitor, mostly abnormally dry-to-moderate drought conditions existed in the Far West.  
Blooming and boll-setting advanced across the region.  Insect pressures were easily managed 
and controlled. Overall, the crop made excellent progress in the Far West.   

Trading 
 
Desert Southwest 
..
No trading activity was reported.   

San Joaquin Valley 
..No trading activity was reported.   

American Pima 
..
No trading activity was reported.   
 

USDA ANNOUNCES SPECIAL IMPORT QUOTA #15 
FOR UPLAND COTTON 
July 30, 2020 


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 
July 30, 2020, allowing importation of 3,892,413 kilograms (17,878 bales of 480-lbs) of upland cotton.  
     
Quota number 15 will be established as of August 6, 2020 and will apply to upland 
cotton purchased not later than November 3, 2020 and entered into the U.S. not later 
than February 1, 2021. The quota is equivalent to one week's consumption of cotton by      
domestic mills at the seasonally-adjusted average rate for the period March 2020 through 
May 2020, 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. 
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