Mp_cn812 January 24, 2020 Weekly Cotton Market Review Spot quotations averaged 54 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 65.95 cents per pound for the week ending Thursday, January 23, 2020. The weekly average was down from 66.49 last week and from 69.17 cents reported the corresponding period a year ago. Daily average quotations ranged from high of 66.79 cents Friday, January 17 to a low of 64.78 cents Tuesday, January 21. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended January 23 totaled 49,718 bales. This compares to 126,308 reported last week and 44,962 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,154,549 bales compared to 371,084 bales the corresponding week a year ago. The ICE March settlement price ended the week at 70.03 cents, compared to 70.22 cents last week. Southeastern Markets Regional Summary Spot cotton trading was light. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were lower. Trading of CCC-loan equities was inactive. A mix of cloudy to sunny conditions were observed across the lower Southeast during the period. Seasonably warm daytime temperatures in the upper 60s dropped into the mid-40s during the week as a cold front moved across the region. Light to moderate rain showers brought around three quarters of an inch to one inch of precipitation to areas throughout the Florida Panhandle and portions of south Alabama over the weekend. Elsewhere in the Southeast, mostly dry conditions helped soft soils to firm from the extended wet weather received in recent weeks. Fieldwork resumed in areas where soils were able to support machinery; producers shredded stalks and harvested the last remaining fields. Several gins in Alabama, the Florida Panhandle, and Georgia continued daily operations as they processed backlogs of modules. Most gins had either finished operations for the season or gone to gin days as they waited for modules to accumulate on gin yards. Producers, ginners, and industry members made plans to attend the Georgia Cotton Commission’s 13th annual meeting scheduled for Wednesday, January 29 at the UGA Tifton Campus Conference Center. Mostly fair to clear conditions prevailed over the upper Southeast during the period. Daytime high temperatures in the 50s to low 60s dipped into the upper 30s to low 40s as a cold front moved across the region during the week. The dry weather helped soft soils to firm and fieldwork resumed in areas where fields could support equipment. Ginning was winding down for the season and many gins had gone to gin days as they waited for the last modules to arrive on gin yards. Textile Mill Domestic mill buyers purchased a light volume of color 41, leaf 4, and staple 35 for nearby fill-in needs. No additional sales or inquiries were reported. Most mills have covered their immediate-to-nearby raw cotton needs. Reports indicated demand for ring-spun and open-end yarn was moderate. Demand through export channels was moderate to good. Agents throughout the Far East inquired for any discounted styles of cotton. Trading .. A moderate volume of color 41, leaf 2-4, staple 35-38, mike 43-49, strength 30-34, and uniformity 81-83 sold for around 70.00 cents per pound, FOB car/truck (Rule 5, compression charges paid). South Central Markets Regional Summary North Delta Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Cotton was being delivered to fulfill contracts. The industry reacted positively to the news that the U.S. Senate had passed the United States-Mexico-Canada Agreement (USMCA). A typical winter weather pattern was experienced during the week. A cold front brought a wintry mix of snow, sleet, and freezing rain to the northern parts of the territory late week. Daytime temperatures were in the 30s to 40s. Overnight lows dipped into the upper 20s and 30s. Approximately 2 inches of precipitation fell in the wettest areas. Wet field conditions and minor flooding of roads hindered ginning operations and prevented some producers from shredding stalks in a timely manner. Damage to pivot irrigation systems, due to very strong winds last week, was still being assessed. Producers and other interested parties attended the Missouri Cotton Production and Outlook Conference, held in Portageville on January 22. The Dumas and Memphis Classing Offices continued processing samples. South Delta Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was slow. No forward contracting was reported. Cotton was being delivered to fulfill contracts. The industry reacted favorably to the passage of the United States-Mexico-Canada Agreement (USMCA) by the U.S. Senate. Seasonably cold weather characterized conditions during the week. Daytime temperatures were in the 30s to 40s. Overnight lows dipped into the upper 20s and 30. Approximately 2 inches of rain fell throughout the region during the period. A few isolated areas received slightly higher amounts. The additional rainfall prolonged localized flooding and continued to hinder some cotton ginning operations. Producers in many areas were still dealing with the effects of the tornadoes that devastated the area last week, including assessing damages to irrigation systems, farm equipment, and structures. Power outages remained in some isolated areas. The Rayville Classing Office continued to operate one shift. According to the U.S. Drought Monitor, abnormal dryness in Louisiana contracted slightly as most rain events missed the areas experiencing moisture deficits. Producers attended local and regional industry meetings. Trading North Delta .. No trading actively was reported. South Delta .. A light volume of CCC-loan equities traded for around 11.00 cents per pound. Southwestern Markets Regional Summary . East Texas Spot cotton trading was active. Supplies were heavy. Producer offerings were moderate. Demand was good. Average local spot prices were lower. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was slow. Foreign inquiries were moderate. Interest was best from Mexico, Pakistan, and Turkey. In the Rio Grande Valley, fields were pre-watered and fertilizer was applied. Corn and other grain crops were planted. Field conditions continued to be dry and rainfall is needed to fortify soils. Producers attended conferences and pre-plant meetings in south Texas. Planting seed was booked. Fields were prepped ahead of sowing. Many fields in the Blackland Prairies remained soggy. Some areas received more than 4 inches of precipitation. Some areas had become dry and the rainfall was welcomed. In Kansas and Oklahoma, beneficial rainfall was received. Some areas received trace amounts, while other areas received over one and one-quarter of an inch of precipitation. Modules were transported from fields to gin yards. Ginning continued uninterrupted. The gins in Kansas had surpassed the half-way mark. A few gins in Oklahoma had finished the season. Oklahoma State University Extension and Texas Agrilife Extension hosted the annual Red River Crops Conference in Altus, OK. West Texas Spot cotton trading was active. Supplies were heavy. Producer offerings were moderate. Demand was good. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was slow. Foreign inquiries were moderate. Interest was best from Mexico, Pakistan, and Turkey. Daytime high temperatures were in the low 30s to mid-70s, and overnight lows were in the 20s to 40s. Soggy fields interrupted fieldwork. Rainfall was welcomed to help recharge fields ahead of the next planting season. The majority of gins have finished the season, but several continued to operate. The Abilene, Lamesa, and Lubbock Classing Offices continued to receive samples to be graded. Regional meetings were held including the Red River Crops Conference in Altus, OK that serves producers from Kansas, Oklahoma, and Texas. Trading East Texas .. In Texas, mixed lots containing a heavy volume of mostly color 32 and better, leaf 4 and better, staple 35 and longer, mike 37-49, strength 28-36, and uniformity 78-82 sold for 67.00 to 67.25 cents per pound, FOB warehouse (compression charges not paid). .. A moderate volume of mostly color 41 and better, leaf 4 and better, staple 34 and longer, mike 38-50, strength 26-32, and uniformity 77-81 sold for around 63.75 cents, same terms as above. .. In Oklahoma, a moderate volume of color 21 and 31, leaf 2, staple 37, mike averaging 46.1, strength averaging 34.6, and uniformity averaging 81.3 sold for around 70.50 cents, FOB car/truck (compression charges not paid). .. A light volume of 2018-crop CCC-loan equities traded for 0.00 to 1.50 cents. .. A light volume of 2019-crop CCC-loan equities traded for 4.50 to 8.25 cents. West Texas .. A mixed lot containing a heavy volume of color mostly 31 and better, leaf 2, staple 31 and 32, mike averaging 45.5, strength averaging 27.5, and uniformity averaging 77.3, sold for around 60.50 cents per pound, FOB car/truck (compression charges not paid). .. A moderate volume of mostly color 31 and 41, leaf 3 and 4, staple 35 and longer, mike 45-49, strength 26-30, and uniformity 77-80 sold for around 57.00 cents, same terms as above. .. A heavy volume of mostly color 31 and 32, leaf 3, staple 31 and 32, mike 42-46, strength 26-30, and uniformity 75-78 sold for around 55.00 cents, same terms as above. .. A light volume of 2018-crop CCC-loan equities traded for -3.00 to 2.00 cents. .. A light volume of 2019-crop CCC-loan equities traded for around 4.50 cents. Western Markets Regional Summary Desert Southwest (DSW) Spot cotton trading was active. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. An open invitation to bid on a light volume of 2018-crop New Mexico CCC-Catalog cotton closed on January 22. No sales were reported. Foreign mill inquiries were light. Temperatures were in the high 60s to low 70s for central Arizona. No rainfall was recorded in the period. Ginning continued uninterrupted in the DSW. Spring fieldwork was active. Producers considered spring planting options. The Visalia Classing Office reported the Arizona season average of Upland color 21 and better was at 55 percent, leaf 2 and better at 67 percent, staple averaging 37.15, mike averaging 4.58 and strength averaging 31.49 for week ending January 23. San Joaquin Valley (SJV) Spot cotton trading was inactive. Supplies and demand were moderate. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Foggy mornings were prevalent in the SJV early in the period. Daytime high temperatures were in the 50s and gradually warmed into the low 60s late in the period. Ginning continued. Producers considered spring planting options. The Visalia Classing Office reported the season average of Upland saw-ginned color 21 and better was at 58 percent, leaf 2 and better at 65 percent, staple averaging 37.25, mike averaging 4.43, and strength averaging 32.94. The Upland roller-ginned season average of color 31 at 53 percent, leaf 2 and better 73 percent, staple averaging 38.48, mike averaging 4.31, and strength averaging 35.80 for week ending January 23. American Pima (AP) Spot cotton trading was inactive. Supplies of 2018-crop cotton were light. Supplies of 2019-crop cotton were heavy. Demand was light. Average local spot prices were steady. Producers delivered 2019-crop cotton into the CCC-loan program or into merchant marketing pools. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. Temperatures were mostly in the 50s and 60s for the Far West. No rainfall was recorded in the period. Ginning continued. Warehouses actively received cotton. The Visalia Classing Office reported the season average AP color 2 and better at 97 percent, leaf 2 and better at 98 percent, staple averaging 49.25, mike averaging 4.12, and strength averaging 44.81 for week ending January 23. Trading Desert Southwest .. A heavy volume of color 21 and better, leaf 2 and better, staple 36 and longer, mike averaging 45.0, strength averaging 31.5, and uniformity averaging 81.5 sold for 125 to 150 points on ICE March futures uncompressed, FOB warehouse (compression charges not paid). .. Similar lots containing mike 50.0 and higher sold for 50 to 100 points off ICE March futures, same terms as above. .. A light volume of mostly color 21 and better, leaf 2 and better, staple 34, mike averaging 48.0, strength averaging 29.0, and uniformity averaging 79.0 sold for around 850 points off ICE March futures, same terms as above. San Joaquin Valley .. No trading activity was reported. American Pima .. No trading activity was reported. USDA ANNOUNCES SPECIAL IMPORT QUOTA #14 FOR UPLAND COTTON January 23, 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 January 30, 2020, allowing importation of 12,240,623 kilograms (56,220 bales) of upland cotton. Quota number 14 will be established as of January 30, 2020 and will apply to upland cotton purchased not later than April 28, 2020 and entered into the U.S. not later than July 27, 2020. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period September 2019 through November 2019, 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.