Mp_cn812 June 5, 2020 Weekly Cotton Market Review Average spot quotations were 171 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 55.22 cents per pound for the week ending Thursday, June 4, 2020. The weekly average was up from 53.51 last week, but down from 63.55 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 53.16 cents Friday, May 29 to a high of 55.98 cents Wednesday, June 3. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended June 4 totaled 24,003 bales. This compares to 13,916 reported last week and 18,676 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,526,086 bales compared to 1,204,014 bales the corresponding week a year ago. The ICE July settlement price ended the week at 60.00 cents, compared to 57.57 cents last week. Southeastern Markets Regional Summary Spot cotton trading was slow. 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. Sunny to mostly cloudy conditions prevailed over the lower Southeastern region during the period. Daytime high temperatures were in the mid-to-upper 80s throughout the week. Scattered shower activity brought moisture to portions of south Alabama, south Georgia, and the Florida Panhandle over the weekend. Day-to-day accumulated precipitation totals measured from trace amounts to around 2 inches of moisture. Planting advanced at a good pace in areas where dry conditions allowed fieldwork to continue without interruption. Some replanting was underway in low-lying areas that received heavy rainfall. The crop progressed well and varied from emerging seedling to pinhead square; local experts reported the bulk of the crop in Alabama ranged from first to fourth true leaf. In central Georgia, producers were making their first applications of plant growth regulators in cotton planted mid-April. Herbicide applications were also underway. Insect pressure was generally light across the region. Thrips were present at treatable levels in some fields. In Alabama, producers continued to battle grasshoppers and cutworm populations were building in some areas. Industry members across the region anticipate a 10 percent or more reduction in acreage compared to last year. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released June 1, cotton planting had reached 92 percent completed in Alabama and 74 percent completed in Georgia. Overcast and wet weather over the weekend gave way to sunnier skies later in the week across the upper Southeastern region. Daytime high temperatures varied from the upper 70s to low 90s. Rainfall accumulations in the Pee Dee region and along eastern North Carolina measured from 1 to 2 inches of moisture. River flood warnings were in effect in some areas. Planting made progress as dry conditions allowed, but in some areas of the Carolinas and Virginia planting is two to three weeks behind schedule. Wet weather during the spring has delayed fieldwork in many areas, or forced producers to replant due to wet and cool conditions. Local experts reported that much of the crop that has emerged ranged between the first to fifth true leaf stage. Thrip and herbicide spray applications were underway. Local experts reported a likely 10 percent or more reduction in acreage in the upper Southeastern region compared to last year. According to the NASS Crop Progress report released June 1, cotton planting remained behind the five-year average at 73 percent completed in South Carolina and Virginia, 65 percent completed in North Carolina. Textile Mill Inquiries from domestic mill buyers were light. No sales were reported. The undertone from mill buyers remained very cautious, due to closures or reduced schedules associated with the COVID-19 virus. Most mills continue to operate at minimal capacity; but cotton deliveries scheduled at some locales the first and second week of June signaled a slight uptick in production. 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. No inquiries were reported. Any interest throughout the Far East centered around attractively priced cotton offered for sale. The undertone from domestic cotton shippers was cautious as they focused on maintaining export commitments already sold. Some cancellations were reported into South Korea. Trading .. A moderate volume of color mostly 11 and 21, leaf 2 and 3, staple 33-37, mike 43-52, strength 28-31, and uniformity 80-83 sold for around 75 points off ICE July Futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage). .. A moderate volume mixed lot containing color 22 and better, leaf 2-4, staple 34 and longer, mike 37-49, strength 28-31, and uniformity 81-83 sold for around 350 points off ICE July futures, same terms as above. 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 slow. Commodity prices improved compared to last month, but there was no interest in forward contracting current crop cotton. The COVID-19 Pandemic continues to negatively impact the globalized economy. Ideal weather conditions prevailed during the week, which aided germination of newly-planted fields and overall plant development. Daytime temperatures were mostly in the upper 80s. Overnight lows were in the 60s and 70s. Light, scattered showers brought less than 1 inch of precipitation to the region. Planting was winding down in Arkansas, but was well behind the five-year average in Missouri and Tennessee. A few producers were planting beyond insurance cut-off dates, or had switched to planting soybeans or a non-harvestable cover crop. According to the National Agricultural Statistics Service’s Crop Progress report released on June 1, cotton planting was at 91 percent completed in Arkansas, 45 in Missouri, and 64 percent in Tennessee. 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 commerce around the world. Clear skies prevailed for most of the week. Daytime temperatures were in the 80s. Warmer overnight temperatures were in the 60s and low 70s. Scattered showers late week brought around 1 inch of precipitation to a few areas. Planting continued at a steady pace in most areas throughout Louisiana, but lagged in Mississippi. Ground and aerial applications of chemicals were made to control thrips and other insect pests in Louisiana. Aphid applications started on a limited basis and a small amount of earlier-planted cotton has been sprayed for plant bugs, as necessary. According to the National Agricultural Statistics Service’s Crop Progress report released on June 1, cotton planting advanced normally to 93 percent completed in Louisiana and 82 percent planted in Mississippi. Trading North Delta .. A heavy volume of CCC-loan equities traded for 4.00 cents per pound. South Delta .. No trading activity was reported. Southwestern Markets Regional Summary . East Texas Spot cotton trading was active early in the reporting period, as ICE July futures were sharply higher. Supplies and producer offerings were moderate. Demand was light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was active. Foreign mill inquiries were light. The COVID-19 Pandemic continued to put pressure on demand and commodity markets. Temperatures were in the mid-to-high 80s in the Rio Grande Valley (RGV). Daily thunderstorm activity deposited three-quarters of an inch up to two inches of moisture for areas of Kingsville to the lower RGV. Producers scouted fields and whitefly pressure was present in the lower RGV. County extension agents reminded producers to continue to monitor for bollworms in Bt cotton fields. This has not been an issue in the Valley, but in past years has been reported in other areas of the state. The irrigated crop continues to make good progress. In the Coastal Bend, flood warnings were issued early in the period. Tropical moisture off the Gulf of Mexico produced scattered, heavy downpours. Some areas received 1 to 2 inches of rainfall, while others reported as much as 12 inches. Local sources reported severe flooding that completely covered cotton stands. Standing water remained in some fields as flood waters slowly receded. Fields that received light general rainfall were in good shape. Growth stages varied from 6 inch tall plants to 12 inches in the Coastal Bend and Upper Coast. Boll-setting was good. South Texans are keeping a watchful eye on Tropical Storm Cristobal. Early computer model analysis’ shows that the expected path maybe Louisiana. Texas A&M Agrilife Extension Service hosted a Virtual Crop Tour. Final planting was in full swing in Kansas as producers made up for rain delays from recent thunderstorms. Early planted stands had emerged under good growing conditions. Kansas producers expected to sow a similar number of acres to last season. Temperatures were in the high 80s to low 90s in western Oklahoma. Around one-tenth of an inch of moisture was received early in the period. Planting advanced under good weather conditions. Sources estimated that planting was nearly completed. No insect pressures were reported, although cotton experts advised to continue monitoring. West Texas Spot cotton trading was active as ICE July futures trended sharply higher early in the reporting period. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were higher. Foreign mill inquiries were light. The COVID-19 Pandemic continued to impact commodity markets. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was active. Temperatures were in the 80s and 90s. Dry conditions had cotton planters rolling around Lubbock. Planting deadlines were fast approaching. For counties surrounding Lubbock, the deadline is June 5 and in the Rolling Plains June 20. Some dryland producers around the Lamesa territory were holding off on planting and are waiting for a good general rain. Irrigation water was applied, but groundwater was limited in some counties. The forecast shows only slight chances of rain over the next 10 days. Trading East Texas .. A heavy volume of Kansas cotton, color 31 and 41, leaf 5, staple 36-38, mike 35-52, strength 28-34, and uniformity 79-82, sold for around 49.50 cents per pound, FOB car/truck (compression charges not paid). .. Similar lots containing color 41 and 42 and mike 35-49 sold for around 46.00 cents, same terms as above. .. In Oklahoma, a heavy volume of color 31 and 41, leaf mostly 5 and 6, staple 36-38, mike 35-51, strength 29-34, uniformity 80-82, with 75 percent extraneous matter sold for around 49.50 cents, same terms as above. .. A heavy volume mixed lot of mostly color 31, leaf 5 and better, staple 36-38, mike 30-32, strength 28-34, uniformity 80-82, with 100 percent extraneous matter sold for around 47.25 cents, same terms as above. .. A moderate volume of Oklahoma 2019 crop CCC-loan equities sold for 1.00 to 6.00 cents. .. A moderate volume of Kansas 2019 crop CCC-loan equities sold for around 2.00 to 2.75 cents. West Texas .. A light volume of mostly color 21, leaf 2 and better, staple 32-37, mike 35-48, strength 27-31, and uniformity 77-80 sold for around 53.00 cents per pound, FOB car/truck (compression charges not paid). .. A light volume mixed lot containing mostly color 22 and 32, leaf 3 and better, staple 32-35, mike 42-52, strength 26-30, and uniformity 78-82 sold for around 50.25 cents, same terms as above. .. Similar lots containing staple 31-33 sold for around 47.50 cents, same terms as above. .. A moderate volume of 2019 crop CCC-loan equities sold for 0.00 to 4.00 cents. .. A light volume of 2018 crop CCC-loan equities sold for around -1.25 cents. Photos courtesy of: Dwight Jackson, National Cotton Council Desert Southwest (DSW) Spot cotton trading was inactive. Supplies were moderate. Demand was light. The effects of the COVID-19 Pandemic slowed the marketing chain for cotton. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Temperatures reached the mid-100s to low 110s in Arizona. Excessive heat warnings were in effect. Blooming and boll-setting continued in Yuma. Producers irrigated the crop to help reduce heat stress. Temperatures in New Mexico and El Paso, TX were in the high 90s to low 100s. Local sources reported the crop was in good condition. Insect pressures were normal and at treatable levels. Zoom meetings were held for field crop workshops and events. San Joaquin Valley (SJV) Spot cotton trading was inactive. Supplies and demand were light. The COVID-19 Pandemic continued to impact the U.S. economy. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Excessive heat warnings were in effect late in the period. Temperatures in the 80s gave way to triple-digit temperatures in the mid-to-high 100s. The crop made good progress. Producers irrigated the crop to combat heat stress. 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 demand for cotton. Foreign mill inquiries were light. Excessive heat with temperatures in the high 100s prompted heat warnings in the Far West. Producers managed heat stress by applying water to the crop. The crop made good progress. The Yuma, AZ crop was blooming. The San Joaquin Valley crop made good progress. Insect pressures were minimal. Western Markets Regional Summary . 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 #7 FOR UPLAND COTTON June 4, 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 June 12, 2020, allowing importation of 11,005,386 kilograms (50,547 bales of 480-lbs) of upland cotton. Quota number 7 will be established as of June 12, 2020 and will apply to upland cotton purchased not later than September 8, 2020 and entered into the U.S. not later than December 7, 2020. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period January 2020 through March 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.