Mp_cn812 July 10, 2020 Weekly Cotton Market Review Average spot quotations were 235 points higher 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 59.91 cents per pound for the week ending Thursday, July 9, 2020. The weekly average was up from 57.56 last week and from 58.45 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 59.43 cents Monday, July 6 to a high of 60.43 cents Wednesday, July 8. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended July 9 totaled 13,090 bales. This compares to 14,318 reported last week and 1,262 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,573,328 bales compared to 1,261,688 bales the corresponding week a year ago. The ICE Oct settlement price ended the week at 64.34 cents, compared to 63.55 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 higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains. Mostly cloudy conditions were observed across the lower Southeastern region throughout the period. Daytime high temperatures were in the upper 80s to low 90s. Widespread thundershowers brought rainfall to areas throughout Alabama, the Florida Panhandle, and Georgia during the week. Day-to-day accumulated precipitation totals measured from one-half of an inch to four inches. The crop progressed well under the seasonally warm conditions and boll-setting was getting underway. The wet weather interrupted fieldwork and delayed the application of some chemical treatments; pressure from weeds, especially palmer amaranth that had increased. In Georgia, some fields were treated for spider mites and stink bugs. However, producers were careful with pesticide applications to prevent flaring other insects, especially white flies. In Alabama, a bollworm/corn earworm moth flight began in the southeastern portion of the state and was expected to migrate north through the end of the month. Tarnished plant bugs were also beginning to migrate into fields. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on July 6, cotton squaring had reached 67 percent completed in Georgia and 66 percent completed in Alabama. A mix of sunny to partly cloudy conditions prevailed across the upper Southeastern region during the period. Daytime high temperatures were in the upper 80s to low 90s. Scattered thunderstorms brought light precipitation to the cotton growing areas of the eastern Carolinas during the week. Precipitation totals measured from a quarter of an inch to around one inch of moisture in most areas. Producers welcomed the moisture in areas that have missed significant rainfall in recent weeks. In the Carolinas, local experts reported that aphids were present in some younger fields. Bollworm moth counts were also rising. Pressure from plant bugs was generally light, but treatments were underway in some fields where populations met threshold limits. In Virginia, tarnished plant bugs were present in some fields and producers treated hot spots. According to the NASS Crop Progress report released on July 6, cotton squaring had reached 47 percent completed in North Carolina, 46 in Virginia, and 37 percent completed in South Carolina. Boll-setting was just getting underway. Textile Mill Inquiries from domestic mill buyers were very light. No sales were reported. The undertone from mill buyers remained very cautious, due to very weak end product demand associated with business closures due to the COVID-19 virus. Mills continued to operate at reduced capacity, but some mills had brought idled plants back into operation recently with plans for additional plants to restart production in late July or early August as orders increase. 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 in Vietnam made initial inquiries for a light volume of 2020-crop cotton; no sales were Trading .. A heavy volume mixed lot containing color mostly 41 and better, leaf 2-4, staple 36 and longer, mike 43-49, strength 29-32, and uniformity 81-83 sold for around 63.25 cents per pound, FOB car/truck (Rule 5, compression charges paid). .. A light volume of color 51, leaf 3 and 4, staple 35 and 36, mike 43-49, strength 28-31, and uniformity 81-83 sold for around 57.00 cents, same terms as above. .. A heavy volume mixed lot containing color mostly 31 and 41, leaf 2-4, staple 35 and longer, mike 37-49, strength 29-32, and uniformity 80-83 sold for around 50 points on ICE December futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage). 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 higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the globalized manufacturing and consumer supply chains. The crop made good progress under hot and wet growing conditions. A series of thundershowers brought up to 2 inches of rain to many areas, with heavier amounts reported in localized spots. Thunderstorms remained in the near-term forecast, which should promote normal crop development but will also hinder timely applications of crop protection chemicals and impede their effectiveness. Daytime temperatures were mostly in the 90s, with the heat index near 100 degrees due to high humidity. Overnight lows were in the 70s. Fields were being carefully scouted to ensure that insect infestations were identified and treated once they reached economic threshold levels. Producers reported varying levels of weed and insect pressure. Producers were applying plant growth regulators, as necessary. According to the National Agricultural Statistics Service’s Crop Progress report released on July 6, squaring had reached 85 percent in Arkansas, 24 in Missouri, and 52 percent in Tennessee. Squaring was about two weeks behind the five-year average in Missouri. South Delta Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. Commodity prices improved during the week, but the COVID-19 Pandemic continues to disrupt travel, trade, and many normal activities around the world. Warm and humid climatic conditions allowed the crop to progress normally during the week. A series of thundershowers brought up to 3 inches of rain to many areas, with heavier amounts reported in a few places. Daytime temperatures were mostly in the upper 80s. Overnight lows were in the 70s. Moderate insect pressure from plant bugs was reported in parts of Mississippi and Louisiana. Treatments were delayed in some fields and producers were concerned about the lack of effectiveness in treated fields, due to persistent rainfall. Boll moth populations were building in most places. Plant growth regulators were also applied in places where weather conditions permitted. According to the National Agricultural Statistics Service’s Crop Progress report released on July 6, squaring had reached 85 percent in Louisiana and 54 percent in Mississippi, which was ahead of the five-year average in Louisiana, but trailed in Mississippi by at least one week. 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 higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were light. Interest was best from China, Taiwan, and Vietnam. The Loan Deficiency Payment remains in effect. The lack of demand and the COVID-19 Pandemic continued to impact commodity markets. In the Rio Grande Valley, bolls were popping open and producers readied equipment for harvest. Harvest aids were applied to more mature fields. In south Texas, fields had dried from recent rainfall and spraying equipment was able to enter the fields and apply treatments for weeds and plant pests. Bolls had begun to open under hot, sunny conditions with daytime temperatures in the upper 80s and low 90s. A good boll load had been established and producers were encouraged. Final irrigation was applied to some fields. In the Blackland Prairies, careful monitoring for bollworms and other insects were underway. Some fields were treated. Heavy rains mid-week slowed fieldwork. The moisture will help fruiting and ease dry conditions. In Kansas, stands struggled to make good progress early. Some fields failed under insurance guidelines. Dryland and irrigated stands are late, but advancing under hot, sunny conditions. In Oklahoma, some stands had begun to square. Irrigation was applied. A trace amount of rainfall was received in localized areas. Excessive temperatures in the low 100s and windy conditions challenged the stands. The area is in need of a period of wet weather. The crop was rated mostly fair to good in Kansas and Oklahoma, according to the National Agricultural Statistics Service’s Crop Progress reports released on July 6. West Texas Spot cotton trading was slow. Supplies were moderate. Producer offerings were moderate. Demand was light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were light. Interest was best from China, Taiwan, and Vietnam. The Loan Deficiency Payment remains in effect. The COVID-19 Pandemic continued to impact commodity markets. Stands struggled with daytime temperature highs in the upper 90s to low 100s. Some fields were blooming, but most were setting squares. Some replanted fields were at cotyledon stage. The dryland fields that had emerged lacked uniformity. A significant number of dryland fields were adjusted and failed under insurance guidelines. Some of those acres were replanted to uninsured cotton and stands had emerged. Irrigation water was applied if available. Afternoon thunderstorms brought beneficial rainfall to some locations. More rainfall would be helpful to keep the crop progressing. Producers continued to manage weeds. Hoe crews removed weed escapes. Pests were mostly light. Treatments were applied as needed. Trading East Texas .. In Kansas, a light volume of mostly color 21 and 31, leaf 4 and better, staple 36 and 37, mike 31-43, strength 29-33, and uniformity averaging 80.3 sold for around 60.00 cents per pound, FOB car/truck (compression charges not paid). .. In Oklahoma, a light volume of mostly color 21 and 31, leaf 2-4, staple 36 and longer, mike 43-46, strength averaging 34.2, and uniformity averaging 81.3 sold for around 63.25 cents, same terms as above. .. A heavy volume of 2019 CCC-loan equities traded for 0.50 to 7.75 cents. West Texas .. A light volume containing mostly color 21 and 22, leaf 2, staple 37, mike 37-42, strength 31-33, and uniformity 80-82 sold for around 61.50 cents per pound, FOB car/truck (compression charges not paid). .. A light volume mixed lot containing mostly color 31 and better, leaf 3 and better, staple 32 and 33, mike 37-49, strength 25-29, and uniformity averaging 78.7 sold for around 50.00 cents, same terms as above. .. A heavy volume of 2019 CCC-loan equities traded for 0.25 to 3.75 cents. Western Markets Regional Summary Desert Southwest (DSW) Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. The effects of the COVID-19 Pandemic slowed the marketing chain for cotton. Producers offered and sold equities late in the period. Foreign mill inquiries were light. Hot, dry conditions continued. Temperatures were in the low 110s in central Arizona. No monsoon developments were reported in cotton-growing areas. Boll-setting was reported at 34 percent, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on July 6. The crop made excellent progress. No significant insect pressures were reported. Temperatures were in the low to mid-100s in southern New Mexico and into El Paso, TX. These areas are under a heat advisory as temperatures are expected to continue in the mid-to-high 100s. New Mexico cotton at squaring stage was reported at 37 percent, according to NASS. The crop was rated mostly fair to good. San Joaquin Valley (SJV) Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. The COVID-19 Pandemic continued to impact the U.S. economy and cotton demand. Foreign mill inquiries were light. Hot and dry conditions continued. Temperatures were in the high 90s. The heat advanced the crop. The crop was rated mostly in good to excellent condition. No insect pressures were reported. According to the National Agricultural Statistics Service’s Crop Progress report released on July 6, squaring was reported at 60 percent and 10 percent of the crop was setting bolls. 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 livelihood of citizens across the nation and world, thus the demand for cotton. Foreign mill inquiries were light. According to the Foreign Agricultural Service export report for week ending July 2 showed 2,800 bales of new sales and reported no cancellations. Export sales were at 455,700 bales of 2019-crop committed AP. Sales for marketing year 2020 were reported at 37,500 bales. Hot, dry conditions were reported throughout the Far West. Temperatures were in the high 90s to low 110s. The heat advanced the crop. Blooming and boll-setting was reported in central Arizona and the in San Joaquin Valley of California. Spray rigs were active applying herbicide, insecticide, or plant growth regulators to the crop. No significant insect pressures were reported. Overall, the crop made excellent progress in the Far West. Trading Desert Southwest .. A heavy volume of 2019-crop CCC-loan equities sold for around 7.00 cents per pound. San Joaquin Valley .. No trading activity was reported. American Pima .. No trading activity was reported. USDA ANNOUNCES SPECIAL IMPORT QUOTA #12 FOR UPLAND COTTON July 9, 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 16, 2020, allowing importation of 3,892,413 kilograms (17,878 bales of 480-lbs) of upland cotton. Quota number 12 will be established as of July 16, 2020 and will apply to upland cotton purchased not later than October 13, 2020 and entered into the U.S. not later than January 11, 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.