Mp_cn206 November 28, 2008 Average spot cotton quotations were 277 points higher than the previous week, according to the USDA, Agricultural Marketing Service’s Cotton Program. Quotations for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 26.5-28.4, uniformity 81) in the seven designated markets averaged 41.11 cents per pound for the week ended Thursday, November 27. The weekly average was up from 38.34 cents reported last week but down from 58.92 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 38.89 cents on Friday, November 21 to a high of 43.36 cents on Wednesday, November 26. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 26 totaled 40,273 bales, compared with 37,149 last week and 49,302 bales a year ago. Total spot transactions for the season were 331,139 bales, compared to 439,236 bales the corresponding week a year ago. The ICE March futures settlement prices ended the week at 46.55 cents, compared to 39.91 cents reported last week. Prices are in effect from November 28-December 4, 2008 Adjustment World Price (AWP) 35.95 ELS Competitiveness Payment 0.00 Loan Deficiency Payment (LDP) 16.05 Fine Count Adjustment 2007 Crop 0.77 Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2008 Crop 0.37 Source: Farm Service Agency, FSA, USDA Southeastern Markets Spot cotton trading was slow. Producer offerings were light. Demand was moderate. Average local spot prices were higher. Supplies were light. Trading of CCC- loan equities was slow. The market tone remained unsettled. Dry conditions allowed harvesting to progress throughout the region. Portions of north Georgia and the Carolinas received light precipitation early in the week, but fieldwork was generally uninterrupted. A hard freeze early in the period halted plant development in later-planted fields. Overnight low temperatures in the high teens to mid- 20s were reported in many areas. Harvesting rapidly neared completion in Alabama and was winding down elsewhere in the Southeast. Ginning continued uninterrupted and many gins were operating around the clock. South Central Markets Spot cotton trading was slow. Available supplies were moderate. Demand was light. Average local spot prices were higher. Trading of CCC-loan equities was active. Producers were offering CCC-loan equities up to seven cents but most producer bids were in the three to four cent range. Inquiries from representatives of domestic and foreign mills were light. No sales were reported. A cold front brought rain showers and cool temperatures to the region early in the reporting period. Accumulations ranged from one to two inches. Topsoil moisture was generally rated as adequate to surplus for the region. Harvesting was completed throughout the region with the exception of a few isolated fields. Stalk shredding and fieldwork were halted for a few days, then continued sporadically under clear, cold conditions late in the period. All but a handful of gins had completed pressing operations for the year. Southwestern Markets Spot cotton trading was slow in the East Texas/Oklahoma and moderate in the West Texas markets. Trading of CCC-loan equities was moderate in the East Texas/Oklahoma market and active in the West Texas market. Supplies of new-crop cotton increas- ed. Demand was light. Average local spot prices for east Texas/Oklahoma and west Texas were higher. Producers put cotton in the CCC-loan program and marketing cooperatives. East Texas/Oklahoma Ideal weather prevailed in Kansas and Oklahoma during the period and harvesting continued uninterrupted. Freezing temperatures recorded early in the period slowed plant maturation. Ginning expanded as backlogs of modules accumulated on gin yards. According to the NASS Crop Progress report for the week ending November 23, Kansas was 35 percent harvested and Oklahoma was 56 percent. West Texas Clear weather allowed producers in the Texas Panhandle to continue harvesting with little interruption. High subsoil moisture levels in irrigated fields in the South Plains contributed to re-growth on cotton. As a result, producers were concerned about chlorophyll staining and bark contamination in stripper-picked cotton. Harvesting continued in the Trans-Pecos and Edwards Plateau with fairly good yields reported. Most gins continued pressing operations over the Thanksgiving holiday due to the late start of the season. Western Markets Spot cotton trading was inactive in the San Joaquin Valley (SJV). Supplies of 2008-crop cotton were moderate. Demand continued light. Average local spot prices were higher. Local FOB traders and producers reported a lack of interest for any price from merchants. Shippers reported little to no demand for SJV cotton. Foreign mills inquired for a light volume of roller-ginned Upland. Some mills were interested in blending roller- ginned Upland with American Pima. Harvesting was virtually complete. Producers concentrated in getting their cotton ginned and in the CCC-loan. Many gins planned on a four-day Thanksgiving break. A few gins were finished for the season. Patches of dense fog returned to the Valley early in the reporting period. A Pacific front brought much needed moisture to the central Valley. Rainfall amounts varied from one-quarter to one- half of an inch. This was the first measurable rainfall in nine months for many Valley locations. Snowfall levels were down around 6,000 feet in the high Sierras. Spot trading of Upland cotton was inactive in the Desert Southwest (DSW). Supplies of 2008-crop cotton were moderate. Demand continued light. Average local spot prices were higher. Local brokers planned on offering producer cotton early next week for the purpose of price discovery. Scattered showers and thunderstorms were received late in the reporting period in Arizona. Ginning was completed in Yuma, Arizona. Central and eastern Arizona, New Mexico, and El Paso, Texas areas continued with harvesting and ginning. American Pima spot cotton trading was inactive. Supplies of 2008-crop cotton were moderate. Demand was light. Foreign mill inquires continued light. No forward contracting or domestic mill activity was reported. Harvesting and ginning continued in the SJV. Textile mill report. Buyers for domestic mills purchased a moderate volume of color 41, leaf 3 and 4, and staple 34 for February 2009 through May delivery. Additional inquiries from domestic mill buyers were light. Some mills were planning to take up to two weeks of downtime for the Thanksgiving holiday due to lackluster finished product sales. The additional downtime has some mills raw cotton needs covered further than anticipated and demand for additional raw cotton for immediate-to-nearby fill-in was light. Inquiries through export channels were moderate. Agents for mills in Taiwan inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 35. Representatives for mills in Thailand inquired for a moderate volume of USDA Green Card Class, color 51 and better, leaf 4, 5, and 6, and staple 34 and longer. These inquiries were for December 2008 through January 2009 shipment. No sales were reported. Southeastern A light volume of 2008-crop cotton, color 41, leaf 3, staple 32 and 33, mike 43- 46, strength 26-28, and uniformity 77-79 traded at around 600 points off ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage). South Central North Delta A light volume of 2007-crop, color mostly 42 and 52, leaf 5 and better, staple 33 and longer, mike 37-45, strength 26-32, and uniformity 78-81 sold at around 35.50 cents per pound, FOB car/truck (Rule 5, compression charges paid). A light volume of forfeited CCC-loan cotton, color 41, leaf mostly 4 and better, staple 33 and longer, mike 37-49, strength 26-34, and uniformity 80-84 sold at around 37.00 cents, FOB warehouse. A heavy volume of 2008-crop equities traded for three to four cents. South Delta A light volume of forfeited CCC-loan cotton, color mostly 41 and 42, leaf 5 and better, staple 34 and longer, mike 42-49, strength 26-32, and uniformity 78-83 sold at around 30.50 cents per pound, FOB warehouse. Southwestern East Texas-Oklahoma A light volume of 2008-crop cotton, color 54 and better, leaf 7 and 8, mike mostly 49-52, strength 26-28, uniformity 80-82, with extraneous matter (bark) sold for 28.00 cents per pound, FOB car/truck. A light volume of 2008-crop equities traded at around two and one-half cents. West Texas A heavy volume of forfeited CCC-loan cotton, color mostly 31 and better, leaf 4 and better, staple mostly 34 and longer, mike 35-49, strength 28-30, and uniformity 79- 81 traded at around 37.50 to 38.50 cents per pound, FOB warehouse. A moderate volume of 2008crop equities traded at around one and three-quarters to two and three-quarters. A light volume of 2007-crop equities traded for zero cents. Western San Joaquin Valley No trading activity was reported. Desert Southwest No trading activity was reported. American Pima No trading activity was reported. The following information was excerpted from a report by the National Agricultural Statistics Service, NASS, released November 25, 2008 Nationally, 73 percent of the cotton acreage was harvested, seven points behind last year and three points behind the 5-year average. Harvesting was complete in Arkansas and Missouri, but was 10 or more points behind in California, Kansas, and Oklahoma. Elsewhere, harvesting was within seven points of the usual pace. Excerpts from National Agricultural Statistical Service, State Agricultural Summary, NASS, USDA, released November 25, 2008 ALABAMA: Days suitable for fieldwork 6.6. Topsoil moisture 4% very short, 28% short, 67% adequate, 1% surplus. Rainfall was very scarce throughout the state as oppose to previous week. As a result from the lack of rainfall, soil moisture had a slight decline from previous week. Weather conditions were adequate enough for growers to have a prosperous work week especially in Districts 30, 40, 50, and 60 with seven suitable days. ARIZONA: NO DATA AVAILABLE ARKANSAS: Days suitable for fieldwork 6.3. Topsoil moisture 1% very short, 15% short, 78% adequate, 6% surplus. Subsoil moisture 1% very short, 13% short, 81% adequate, 5% surplus. Farmers finished cotton harvesting last week. CALIFORNIA: Cotton defoliation and harvesting activities were nearing completion. Some of the picked fields were disked and shredded. GEORGIA: Days suitable for fieldwork 6.2. Topsoil moisture 6% very short, 39% short, 53% adequate, 2% surplus. Soil moisture conditions 6% very short, 39% short, 53% adequate, and 2% surplus. Despite the rain received the previous week, some areas still need more. Farmers were able to continue picking cotton despite having to wait for some fields to dry from the previous week's rain. KANSAS: Days suitable for field work 6.2. Topsoil moisture 1% very short, 7% short, 85% adequate, 7% surplus. Subsoil moisture 1% very short, 10% short, 86% adequate, 3% surplus. Days suitable for fieldwork 6.1. Soil moisture 6% very short, 36% short, 53% adequate, 5% surplus. LOUISIANA: Days suitable for fieldwork 6.1. Soil moisture 6% very short, 36% short, 53% adequate, 5% surplus. MISSISSIPPI: Days suitable for fieldwork 5.7. Soil moisture 19% very short, 16% short, 54% adequate, 11% surplus. Cotton 98% harvested, 100% 2007, 100% average. MISSOURI: Days suitable for fieldwork 6.2. Topsoil moisture 2% very short, 14% short, 76% adequate, 8% surplus. With the dry week, harvest season neared completion. Reporters commented that crop yields were better than expected. Temperatures ranged from 5 to 13 degrees below average across the state. Rainfall was very light at 0.01 inches for the state. The north-central, northeast, southwest, and southeast districts reported no rainfall. NEW MEXICO: Days suitable for fieldwork 6.6. Topsoil moisture 14% very short, 50% short, 36% adequate. Wind damage 14% light. Freeze damage 10% light, 8% moderate, 17% severe. Cotton 14% fair, 72% good, 14% excellent; 70% harvested. Weather conditions remained warm and dry across New Mexico through midweek. However, temperatures fell sharply over portions of eastern and central New Mexico Thursday, in the wake of a vigorous cold front that passed through the state. Very light precipitation was reported. Warmer temperatures returned by the weekend. NORTH CAROLINA: Days suitable for field work 5.1. Soil moisture levels 4% very short, 12% short, 76% adequate, and 8% surplus. Activities during the week included the harvesting of cotton. Average temperatures were below normal for this time of year, ranging from 16 to 42 degrees. Cotton harvesting progressed normally. OKLAHOMA: Days suitable for fieldwork 6.3. Topsoil moisture 16% very short, 29% short, 54% adequate, 1% surplus. Subsoil moisture 14% very short, 25% short, 60% adequate, 1% surplus. Cotton condition 9% poor, 30% fair, 51% good, 10% excellent. SOUTH CAROLINA: Days suitable for fieldwork 6.1. Soil moisture 5% very short, 29% short, 65% adequate, 1% surplus. Cotton 3% very poor, 9% poor, 46% fair, 35% good, 7% excellent. Fields were still wet from the previous week?s storms on Monday, but breezy, dry winds enabled harvesting to resume shortly thereafter. There were several heavy frosts reported in rural areas across the state. Cotton harvesting continued to look good. Some producers were finished picking, but were still waiting on modules to be ginned. Overall, the week was cold and dry. A series of bracing, Arctic-origin fronts sent the mercury to the lowest values since January 2008. A brief push of mild air spread into the northwest corner of the Upstate Thursday ahead of the week?s second cold front. Most locations on Saturday recorded high temperatures in the 40?s. The state average temperature for the week was thirteen degrees below normal. The state average rainfall for the period was 0.0 inches. TENNESSEE: Days suitable for fieldwork 5. Topsoil moisture 5% very short, 27% short, 67% adequate, 1% surplus. Subsoil moisture 17% very short, 32% short, 51% adequate. A series of cold fronts affected the state this week and brought colder temperatures to the area. Temperatures across the state last week averaged below normal. Rainfall amounts averaged well below normal, with many areas receiving no precipitation at all. TEXAS: Top soil moisture was mostly short to adequate statewide. Cotton condition was mostly fair to good statewide. VIRGINIA: Days suitable for fieldwork 5.4. Topsoil moisture 10% very short, 22% short, 65% adequate, 3% surplus. Subsoil moisture 21% very short, 25% short, 53% adequate, 1% surplus. Cotton 81% harvested, 99% 2007; 85% average. It was a cold week for Virginia. Precipitation came in the form of rain and snow. Throughout the state, subsoil moisture was becoming a concern. The following information was excerpted from the Cotton and Wool Situations and Outlook Yearbook Summary, released November 24, 2008, by the Economic Research Service, USDA Global Economic Slowdown Impacts 2008/09 World Cotton Mill Demand and Trade The global cotton outlook for 2008/09 (August/July marketing year) has changed considerably given the recent economic developments from around the world. Consumer demand for cotton products has slowed, impacting cotton mill use and trade for many countries. World cotton mill use in 2008/09 was forecast at 119.3 million bales, 4.1 million (3 percent) below last season and the lowest since 2005/06. Global use peaked in 2006/07 at nearly 123.5 million bales. Foreign cotton mill use was expected to decline 3 percent to 114.9 million bales in 2008/09, while U.S. mill use continues its trend lower. Foreign cotton mill use rose nine consecutive seasons to a record of nearly 118.8 million bales in 2007/08. Among foreign mill users, the largest declines in 2008/09 are foreseen in China and Turkey (one million bales lower in each), Pakistan (400,000 lower), and India (300,000 lower). Despite the decline, however, China?s mill use (51 million bales) will account for nearly 43 percent of world cotton mill use in 2008/09. Global cotton production in 2008/09 was projected at 112.9 million bales, six percent below last season?s output of 120.5 million bales but still the fifth largest cotton crop on record. Foreign cotton production in 2008/09 was estimated at 99.3 million bales, down from 2007/08?s record but still the third largest crop. Production was mixed among the major foreign-producing countries this season. China--the world?s largest producing country--was forecast to harvest half a million bales less in 2008/09. In contrast, India and Pakistan were expected to produce slightly larger crops in 2008/09. The United States accounted for most of the decline in 2008/09 world production, as the U.S. cotton crop was 30 percent (5.7 million bales) lower than a year earlier at 13.5 million bales. Planted area was reduced 13 percent from 2007/08 due to higher net return expectations for competing crops relative to cotton. While U.S. cotton plantings were at their lowest since 1983/84, weather conditions were less favorable this season as the abandonment estimate rose to a 10-year high of 17.5 percent. As a result, U.S. harvested area was estimated at only 7.8 million acres in 2008/09, the lowest in 25 years. With foreign cotton mill use forecast to decrease significantly more than production, 2008/09 global trade in raw cotton was also expected to decline from last season as a result of the slowing global economy. World cotton trade was projected at 35.2 million bales this season, compared with 38.7 million bales in 2007/08. Foreign shipments were expected to decline 11 percent from 2007/08, while U.S. exports were forecast to decrease five percent. World ending stocks for 2008/09 were forecast at 57.4 million bales, four million below last season and the lowest in five seasons. This season?s reduction in stocks is attributable to the production decline, which more than offset the expected reduction in global cotton mill use. The global stock decline was largely attributable to the projected reduction in the United States, as nearly offsetting changes were expected elsewhere. U.S. stocks are forecast to fall 3.8 million bales to 6.2 million, the lowest in three years. A special article, ?Fiber Use for Textiles and China?s Cotton Textile Exports,? reviews the methodology USDA uses to estimate the cotton mill-use equivalence of U.S. and Chinese textile trade. A new, lower estimate of China?s net textile trade in cotton raw-fiber equivalents results from revised estimates of fiber waste during spinning and the role of recycling in the production of textiles. Domestic mill consumption of cotton averaged 16,700 running bales per day in October 2008, according to the Bureau of the Census. This was up from 15,900 bales per day a month earlier but down from 18,300 bales in October last year. Consumption totaled 334,000 bales in October (four weeks), down from 399,000 bales the previous month (five weeks) and 366,000 bales in October last year (four weeks). Stocks of cotton at mills totaled 156,000 bales at the end of October 2008 according to the Bureau of the Census. This compares with 149,000 bales held a month earlier and 179,000 bales held at the end of October last year. Cotton in public storage totaled 8,766,000 bales at the end of October, up from 6,817,000 bales the previous month but down from 10,332,000 bales at the end of October last year.