Mp_cn812 August 14, 2020 Weekly Cotton Market Review Spot quotations averaged 166 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 57.62 cents per pound for the week ending Thursday, August 13, 2020. The weekly average was down from 59.28 last week, but up from 54.15 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 58.39 cents Tuesday, August 11 to a season low of 57.20 cents Wednesday, August 12. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 13 totaled 7,915 bales. This compares to 65,659 reported last week and 5,407 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 66,837 bales compared to 9,026 bales the corresponding week a year ago. The ICE Oct settlement price ended the week at 62.43 cents, compared to 64.41 cents last week. Southeastern Markets Regional Summary Spot cotton trading was slow. Supplies and producer offerings were light. Demand was light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. Producers forward contracted a light volume of 2020-crop cotton. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains. Mostly fair to partly cloudy conditions dominated the weather pattern across the lower Southeastern region during the period. Daytime high temperatures were mostly in the low 90s. Afternoon pop up showers brought moisture to areas throughout the region, with the heaviest rainfall received along the Atlantic coastal areas. Weekly accumulated precipitation totals measured from one-half of an inch to two inches of moisture, with heavier amounts received in localized areas. The rainfall helped improve moderate drought and abnormally dry conditions in southeast and central Georgia. However, in Alabama, there was a mix of improvements and expansion of abnormally dry conditions based upon spotty precipitation, according to the U.S. Drought Monitor. The crop advanced at a rapid pace and squaring was virtually complete. In some of the earliest-planted fields, plants were cutting out and bolls were cracking open. Insect and disease pressure was mixed across the region. In Alabama, target spot was spreading in some fields and treatments for plant bugs and stink bugs continued. In Georgia, producers have continued to battle silverleaf whiteflies in some areas the last few weeks. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 10, boll-setting reached 85 percent completed in Alabama and 84 percent completed in Georgia. A mix of cloudy to sunny conditions prevailed across the upper 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 of the eastern Carolinas and Virginia over the weekend and during the week. Rainfall totals measured from 1 to 4 inches. Flash flood watches remained in effect in some areas late in the week as slow moving systems produced locally heavy downpours. The beneficial rainfall helped cool heat stressed plants and invigorate the crop. Insect pressure was spotty. In the Carolinas, producers monitored fields for aphids, plant bugs, and stink bugs. Field scouts were also monitoring bollworm populations. In Virginia, plant bug populations were spiking in some fields. According to the NASS Crop Progress report released August 10, boll-setting had reached 83 percent completed in Virginia, 74 in North Carolina, and 65 percent completed in South Carolina. Textile Mill Inquiries from domestic mill buyers were very light. No sales were reported. Most mills have covered their raw cotton needs through the fourth quarter. Some mills do not anticipate transitioning to using 2020-crop cotton until January or February 2021, due to lower demand associated with the COVID-19 Pandemic. The undertone from mill buyers remained cautious as mills continued to operate at reduced capacity. 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. Demand was best throughout the Far East for any discounted styles of cotton. Trading .. A heavy volume mixed lot containing color mostly 31 and 41, leaf 2-4, staple 36 and longer, mike 37-49, strength 31-35, and uniformity 82-84 sold for around 350 points off ICE December futures, FOB car/truck (Rule 5, compression charges paid). 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 weather pattern was characterized by hot and dry conditions early in the week. Daytime temperatures were mostly in the 90s. Overnight lows were in the mid-70s. Heavy thunderstorms brought beneficial moisture and welcome relief from the heat late week. Most areas reported one-half of an inch up to two inches of precipitation. The crop made steady progress under good weather conditions. Early-planted fields had reached cut-out. Insect pressure from bollworms and plant bugs was heavy in some places; some fields were also treated for infestations of spider mites. Boll loads were good in most places; producers in northern areas were hoping for an extended period of warm weather, which will be necessary for the top crop to reach full yield potential. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on August 10, cotton setting bolls had reached 98 percent in Arkansas, 44 in Missouri, and 79 percent in Tennessee. NASS reported that bolls opening was underway at 5 percent completed in Arkansas; no open bolls were reported in Missouri or Tennessee. The NASS Crop Production report, released on August 12, estimated that Upland cotton production in the North Delta will be around 2,835,000 statistical bales, compared with 3,381,000 bales last season. 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. Hot, dry weather prevailed during most of the week. Daytime temperatures were in the upper 80s to low 90s. Overnight lows were in the low 70s. A series of thundershowers brought around 2 inches of beneficial moisture to Mississippi and provided some relief from hot temperatures. The crop made excellent progress under good growing conditions. Local experts reported that more fields had reached cut-out; while many fields were still in bloom. Insect pressure from plant bugs and bollworms was heavy in parts of Mississippi and Louisiana. Fields were treated as necessary to control infestations. Producers remained optimistic about good-to-excellent yields due to good fruit retention. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on August 10, cotton setting bolls had reached 96 percent in Louisiana and 78 percent in Mississippi. NASS reported that the bolls opening had reached 20 percent completed in Louisiana and 4 percent in Mississippi. The NASS Crop Production report, released on August 12, estimated that Upland cotton production in the South Delta will be around 1,790,000 statistical bales, compared with 2,203,000 bales last season. 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 to moderate. 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. Damage assessments in the Rio Grande Valley were ongoing following the aftermath of Hurricane Hanna’s high winds and flooding. Damage to cotton fields was devastating. Determinations were being made on the late planted stands by insurance adjusters. Most of the early-planted fields were lost. Some gins were able to process modules that had been delivered before the hurricane. Several roadways were impassable, and a few gins not accessible. Harvesting advanced in the Coastal Bend under temperature highs in the upper 80s to low 90s. Bolls were opened with a good top crop. Virtual meetings were held by different industry groups. Defoliants were applied in the Upper Coast after soils firmed and were able to support equipment. In the Blackland Prairies (BP), fields advanced with daytime temperatures in the low 90s to low 100s. Rain would be beneficial for most BP locations to help finish the crop and build boll size. Producers prepared to apply defoliants in about 10 days. In Kansas, stands advanced and the boll load was good. Insect pressure was light and many fields received plant growth regulator treatments mixed with insecticide. In Oklahoma, squaring reached 95 percent, the same as last year and the five-year average, according to the National Agricultural Statistics Service’s Crop Progress report released on August 10. Scouting fields for insects was underway, including bollworm. The irrigated crop advanced, but many hoped for a good general rain event. 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 slow. Foreign inquiries were light to moderate. 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 90s to low 100s. Rainfall was spotty and much needed to enhance stand vigor. A widespread rain event is needed to help ease droughty conditions. Gusty winds up to 50 miles per hour further dried soils. More fields had begun to bloom. Some dryland stands had reached cut-out. Monitoring fields for bollworm, lygus, and stink bugs was ongoing. Beneficial populations were good and helped keep aphids under control. Trading East Texas .. In south Texas, a light volume of 2019-crop color 43 and better, leaf 5 and better, staple 34 and longer, mike 39-47, strength averaging 30.7, and uniformity averaging 80.9 sold for around 51.75 cents per pound, FOB warehouse (compression charges not paid). .. In Kansas, a mixed lot containing a light volume of 2019-crop mostly color 32 and 42, leaf 4 and 5, staple 36 and 37, mike 39-42, strength averaging 32.0, uniformity averaging 80.6, and 75 percent extraneous matter sold for around 50.00 cents, FOB car/truck (compression charges not paid). .. In Oklahoma, a mixed lot containing a light volume of 2019-crop mostly color 32 and 42, leaf 3 and 4, staple 36, mike averaging 45.8, strength averaging 32.9, uniformity averaging 80.7, and 50 percent extraneous matter sold for around 55.25 cents, same terms as above. .. A heavy volume of 2019 CCC-loan equities traded for 2.50 to 7.50 cents. West Texas .. A light volume of 2019-crop cotton mostly color 42 and better, leaf 2 and 3, staple 32 and 33, mike 44-49, strength 28-30, uniformity 78-80, and 25 percent extraneous matter sold for around 52.00 cents per pound, FOB car/truck (compression charges not paid). .. A mixed lot containing a light volume of 2019-crop mostly color 32, leaf 3 and 4, staple 32-34, mike averaging 47.0, strength averaging 27.9, uniformity averaging 79.3, and 75 percent extraneous matter sold for around 51.50 cents, same terms as above. .. A light volume of 2019 CCC-loan equities traded for 1.00 to 6.00 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 disrupt the U.S. economy and global cotton demand. The second week into the new marketing year produced no fresh business. No foreign or domestic mill activity was reported. Foreign mill inquiries were light. Temperatures continued in the high 100s to mid-110s in western and central Arizona. Excessive heat warnings are in effect through the weekend. The Yuma crop approached cut-out stage. Defoliation activities advanced. The crop made good progress in central Arizona. Heat stress remains a concern. Some boll shedding was reported. Producers will manage heat stress with irrigations. The monsoon season is a ‘non-event’. No significant moisture has been received. No significant insect pressures were reported. High temperatures prompted heat advisories for New Mexico and El Paso, TX. Temperatures were in the mid-100s. Nighttime temperatures dropped into the 60s. Scattered showers brought little moisture to the area. Cotton made good progress. Some fields were treated for bollworm and lygus. Local sources reported there is enough irrigation water to run into September. 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 global cotton demand. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. A high pressure system off the coast of California pushed temperatures into the triple digits mid-week. This is just the beginning of the hot temperature streak. High temperatures were in the low 100s and are forecasted to gradually increase into next week. Hot conditions created thunderstorms in higher elevations of the Sierra Nevada Mountain range. Nighttime lows were in the 60s, which gave the crop a respite from the heat. Local sources reported little to no boll shed. Boll-setting advanced. Insect pressure was mild and easily controlled. Growers were optimistic on yields, estimating just over 3 bales per acre. The crop made excellent progress. Mapping of northern and southern CA counties cotton acreage by the California Department of Agriculture continued. 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. No new-crop contracts were offered. The COVID-19 Pandemic continues to affect the global demand for Extra Long Staple cotton. Foreign mill inquiries were light and for prompt shipment. Interest was best from China, India, and Peru. U.S. shippers and merchants were optimistic of resumed talks between China and U.S. trade over the weekend in hopes of continued compliance with the Phase One agreement. AP carryover will be the largest it has been in years. Shippers continued to offer 2019-crop cotton. Industry sources were disappointed that AP cotton was not included in the second round of the Coronavirus Food Assistance Program. Hot, dry conditions were reported throughout the Far West. Excessive heat warnings were issued. Triple-digit temperatures dropped into the 60s at night in California, New Mexico, and El Paso, TX giving cotton plants a rest from the heat. No rainfall was recorded in the period. Boll-setting advanced across the region. Insect sweeps were made, and no significant issues were reported. Defoliation began in Yuma, AZ fields. The surveying and mapping of AP acreage began in the San Joaquin Valley (SJV) on July 13. Three of seven SJV counties were mapped for AP acreage. Approximately 87,625 acres have been mapped since July 31, according to the California Department of Agriculture. 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 #17 FOR UPLAND COTTON August 13, 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 August 20, 2020, allowing importation of 1,809,441 kilograms (8,311 bales of 480-lbs) of upland cotton. Quota number 17 will be established as of August 20, 2020 and will apply to upland cotton purchased not later than November 17, 2020 and entered into the U.S. not later than February 15, 2021. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period April 2020 through June 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.