Weekly Cotton Review

April 29, 2011

Spot cotton quotations averaged 14 cents lower 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 160.94 cents per pound for the week ended Thursday, April 28, 2011. The weekly average was down from 175.16 cents last week, but up from 77.83 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 169.28 cents on Monday, April 25 to a low of 154.94 cents on Thursday, April 28. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 28 totaled 1,866 bales. This compares to 0 bales last week and 7,460 bales reported a year ago. Total spot transactions for the season were 581,282 bales, compared to 863,410 bales the corresponding week a year ago. The ICE July futures settlement prices ended the week at 152.02 cents, compared to 167.51 cents last week.

Prices are in effect from April 29-May 5, 2011

Adjustment World Price (AWP) 163.23 ELS Competitiveness Payment 0.00

Loan Deficiency Payment (LDP) 0.00 Fine Count Adjustment 2009 Crop 0.20

Coarse Count Adjustment (CCA) 0.00 Fine Count Adjustment 2010 Crop 0.30

Source: Farm Service Agency, FSA, USDA

Southeastern Markets Spot cotton trading was inactive. Supplies were light. Demand was light. Producer offerings were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive.

Another round of violent weather left a trail of death and destruction across the entire region as many areas were still attempting to recover from a series of battering storms during the period. An outbreak of dozens of deadly tornadoes inflicted massive damage from Alabama to Virginia; at least 210 people were confirmed dead and 1,724 injured in Alabama alone. The city of Tuscaloosa was particularly devastated as an enormous tornado raked across the town and leveled homes and buildings. The President declared a state of emergency for Alabama and moved to provide federal aid. Planting activity was getting underway, but was delayed in areas affected by the inclement weather. Topsoil was drying out in the cotton growing areas of south Georgia that had missed rainfall in recent weeks. Producers were irrigating and applying pre-plant herbicides and burndowns throughout the region.

South Central Markets North Delta

Spot cotton trading was inactive. Supplies and demand were very light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported.

A series of fast-moving weather systems produced severe weather in the form of large hail stones, high winds, and heavy thunderstorms throughout the region during the period. Thirty-three people were reported killed in Tennessee by tornadoes that touched down. Extensive damage to structures, personal property, trees, and power lines remained in the wake of the storms. Power outages were common. Low-lying fields were flooded. Many roads were closed due to high water levels as most area rivers exceeded the flood stage. Rainfall totals of 8 to 15 inches were reported. Overnight temperatures were in the mid 60s and daytime conditions were unseasonably cool late in the period. Fieldwork was delayed in most areas as producers waited for saturated soils to firm. Damage estimates to previously planted fields were delayed until water levels receded. South Delta

Spot cotton trading was inactive. Supplies and demandwere very light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Dry conditions early in the period hindered cotton planting as producers waited for rain to provide sufficient topsoil moisture to insure good seed germination. Severe weather later in the period resulted in three to five inches of badly needed rain, which in turn delayed planting until soft soils could firm enough to support equipment. High winds also damaged trees, buildings, and other personal property. Many low-lying fields were flooded. Cotton acreage was expected to be negatively impacted, but local experts stated that it was too early to determine how many acres would be affected. Planting advanced slowly to 33 percent completed in Louisiana but jumped to 26 percent in Mississippi. Southwestern Markets

East Texas-Oklahoma

Spot cotton trading was inactive. Supplies were light. Demand was light. Producer offerings were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Foreign mill interest was very light. Severe thunder storms swept across northeastern Texas and spawned tornadoes that destroyed some homes and farm structures. One to five inches of precipitation were received, which lessened droughty conditions. Planting continued in South Texas. Established stands suffered from a lack of adequate moisture. Strong winds intermittently delayed field activities. Planting was completed in the Lower Valley. In Oklahoma, the predominant cotton-producing areas received light showers; however, more planting rain was needed to build soil moisture. According to the National Agricultural Statistical Service, seedbed preparation was 63 percent complete, and 11 points behind normal. In Kansas, field preparations were completed. Light rain showers were received, but the cotton-growing areas remained critically dry.

West Texas

Trading of spot cotton was inactive. Supplies were light. Demand was light. Average local spot prices were lower. Producer offerings were light. No forward contracting was reported. Trading of CCC-loan equities

was inactive. No domestic mill activity was reported. Foreign mill interest was light.

Limited planting was underway on irrigated acres in the Southern High Plains. The dryland fields were too dry for working or planting. Blowing winds intermittently delayed outside activities. Liquid fertilizer was applied as the weather allowed. Droughty conditions prevailed, but a severe thunderstorm developed near Abilene. The storm spawned several tornados and deposited one to six inches of rain. Golf-ball sized hail was reported. The beneficial precipitation provided some relief from droughty conditions in the localized area. The area remained under severe to exceptional drought according to the U.S. Drought Monitor. Wildfire warnings remained in effect. Wildfires were the result of dry conditions and 60 mph wind gusts. Daytime highs were 70s to 90s, and the nighttime lows were 30s to 60s, which warmed soils to desired planting temperatures. Western Markets

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light as ICE futures prices continue to decline.

The crop progress was normal and rated mostly good in Yuma, Arizona. Planting expanded rapidly throughout Arizona and into New Mexico and El Paso, Texas. Hot, windy conditions were the norm in New Mexico and El Paso, Texas. No moisture was recorded in the period. Planting was slightly ahead of schedule, with some seedling emergence reported. Irrigation water availability was a concern for growers in eastern New Mexico and into Texas. Some growers had to pump water for pre-plant irrigating. Only one-half inch of rainfall was recorded in Dona Ana County of New Mexico in the past seven months. The historical average for the area is around three and one-half inches. Strong winds and low humidity continued to plague the region. San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies were light. Demand was moderate. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light as ICE futures prices continue to decline.

Planting expanded in the SJV. Planting in the southern end of the Valley was virtually completed. Seedling emergence varied throughout the Valley. Early-planted cotton fields were assessed for population counts and stand evaluations. Some producers helped seedlings along by removing caps. American Pima (AP)

Spot cotton trading was inactive. Supplies were light. Demand was good. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light, with interest best from China.

Planting continued in California, New Mexico, and El Paso, Texas. Crop progress was normal in Yuma, Arizona. The crop made good progress in California, although it is considered to be late. Windy conditions throughout the region dried soils and producers began irrigating. Extreme drought conditions persisted in New Mexico and El Paso, Texas.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2011-crop cotton, color 41, leaf 4, and staple 34 for first quarter 2012 delivery. Additional inquiries were light. No sales were reported. Most mills continued to operate at capacity. Inquiries through export channels were light. Rising cancellations for 2010-crop cotton were reported from some exporters.

Southeast

* No trading activity was reported.

North Delta

* No trading activity was reported.

South Delta

* No trading activity was reported.

East Texas

* A very light volume of color 42 and better, leaf 6 and better, staple 30-35, mike 34-49, strength 20-30, and uniformity 75-82 sold for around 135.00 cents per pound, FOB car/truck (compression charges not paid).

* A light volume of color 34 and better, leaf 6 and better, staple 30-38, mike 37-55, strength 24-34, and uniformity 77-84 sold for around 123.50 cents, same terms as above.

* In Oklahoma, a very light volume of color 53 and better, leaf 6 and better, staple 33-37, mike 32-55, strength 34-36, and uniformity 77-82 sold for 153.00 to 155.00 cents, same terms as above.

* A light volume of color 41 and better, leaf 4 and better, staple 33-37, mike 44-54, strength 26-36, and uniformity 79-84 sold for around 140.50 cents, same terms as above. West Texas

* A very light volume of color 31 and better, leaf 4 and better, staple 33-37, mike 36-51, strength 28-32, and uniformity 80-83 sold for around 165.00 cents per pound, FOB car/truck (compression charges not paid). * A very light volume of color 32 and better, leaf 4 and better, staple 30-34, mike 30-54, strength 24-37, and uniformity 75-82 sold for around 155.00 cents, same terms as above. * A very light volume of color 41 and better, leaf 7 and better, staple 34-38, mike 32-35, strength 22-33, and uniformity 78-82 sold for around 123.50 cents, same terms as above. Desert Southwestern * No trading activity was reported. San Joaquin Valley

* No trading activity was reported.

American Pima

* No trading activity was reported. Excerpts from National Agricultural Statistical Service, State Agricultural Summary, NASS, USDA, released April 26, 2011

ALABAMA: Days suitable for fieldwork 4.6. Topsoil moisture 4 percent very short, 18 percent short, 52 percent adequate, and 26 percent surplus. The total precipitation ranged from 0.01 in Alexander City, to 2.9 inches in Hamilton. Several areas throughout Alabama received no rain at all this past week.

ARIZONA: Temperatures were above normal across the state for the week ending April 24th, ranging from 3 degrees above normal at various locations to 10 degrees above normal at Grand Canyon. The highest temperature of the week was 98 degrees at Yuma. The lowest reading was 23 degrees at Grand Canyon. All of the weather stations across the state, except Kingman, have below normal precipitation to date. Cotton planting is 55 percent complete, 8 percentage points ahead of last year and 15 percentage points ahead of the 5-year average.

ARKANSAS: Days suitable for fieldwork 3.1. Topsoil moisture 1 percent very short, 9 percent short, 50 percent adequate, 40 percent surplus. Subsoil moisture 4 percent very short, 17 percent short, 56 percent adequate, 23 percent surplus. Fieldwork was limited last week due to the heavy rains and wet soil conditions across much of the state. However, some producers were able to work in the field and apply pre-emergence herbicides and continue planting activities.

CALIFORNIA: Some cotton fields had crusted from the recent rainfall, leading growers to use light tillage to break through the crust.

FLORIDA: Topsoil moisture 17 percent very short, 53 percent short, 29 percent adequate, 1 percent surplus. Subsoil moisture 6 percent very short, 53 percent short, 40 percent adequate, 1 percent surplus. Cotton producers prepared fields for planting in Jackson, Okaloosa counties.

GEORGIA: Days suitable for fieldwork 6.0. Topsoil moisture 8 percent very short, 41 percent short, 45 percent adequate, 6 percent surplus. Subsoil moisture 4 percent very short, 39 percent short, 54 percent adequate, 3 percent surplus. Cotton 7 percent planted, 8 percent 2010, 6 percent avg. Precipitation estimates for the state ranged from no rain up to two inches. The week’s average temperatures ranged from the lower 60s to the upper 70s.

KANSAS: Days suitable for fieldwork 5.1. Topsoil moisture 22 percent very short, 25 percent short, 46 percent adequate, 7 percent surplus. Subsoil moisture 22 percent very short, 28 percent short, 47 percent adequate, 3 percent surplus. Only a few areas in Kansas received beneficial moisture from last week’s storms as producers in many areas continue to need moisture. Dry conditions in the western districts along with the South Central District are a sharp contrast to the conditions in the Southeast where some areas have seen excessive rainfall. Across the state, temperatures were below normal in the north and above normal in the south. Highs ranged from the upper 60s to 88 degrees in Liberal, while lows ranged from the lower 40s down to 29 degrees in Healy and Oberlin. Dry soil in the west and wet soil in the east, combined with cool soil temperatures slowed progress last week.

LOUISIANA: Days suitable for fieldwork 6.4. Soil moisture 27 percent very short, 41 percent short, 28 percent adequate, and 4 percent surplus.

MISSISSIPPI: Days suitable for fieldwork 3.7. Soil moisture 1 percent very short, 12 percent short, 55 percent adequate and 32 percent surplus. Cotton 5 percent planted, 26 percent 2010, 17 percent avg. Rain and wet soils have continued to slow down planting progress. Reports were made of some flooding of fields in the Delta.

MISSOURI: Days suitable for fieldwork 1.1. Topsoil moisture 40 percent adequate, 60 percent surplus. Precipitation 2.59 in. Temperatures 4 to 8 degrees below average for the north and central districts, 2 to 4 degrees above average for the southern districts. Excessive rain halted fieldwork. Two counties reported greater than 9.5 in. rainfall. NEW MEXICO: Days suitable for fieldwork 6.6. Topsoil moisture 57 percent very short, 36 percent short and 7 percent adequate. Wind damage 15 percent light, 13 percent moderate and 8 percent severe. No freeze damage. Dry and windy conditions were observed across New Mexico during the week. A cold front during the weekend brought some light showers across the northeast. Temperatures were 5 to 10 degrees above normal across the state, with the exception of the northwest were temperatures ranged from 2 to 5 degrees above normal.

NORTH CAROLINA: Days suitable for field work 5.0. The same as the previous week. Soil moisture 8 percent short, 75 percent adequate and 17 percent surplus. The state received below normal precipitation and above normal average temperatures last week. As the state continues to assess the damage from last weekend’s storm, many farmers have reported building debris and blown trees in fields. Some have even reported losses in farm buildings and structures, livestock and crops.

OKLAHOMA: Days suitable for fieldwork 5.4. Topsoil moisture 63 percent very short, 18 percent short, 17 percent adequate, 2 percent surplus. Subsoil moisture 65 percent very short, 22 percent short, 12 percent adequate 1 percent surplus. Cotton seedbed prepared 63 percent this week, 52 percent last week, 71 percent last year, 74 percent average.

SOUTH CAROLINA: Days suitable for fieldwork 5.8. Soil moisture 1 percent very short, 17 percent short, 78 percent adequate, 4 percent surplus. Warm temperatures and scattered thunderstorms characterized the week ending April 24. Highs were in the 80s for much of the state all week, scattering heat driven thunderstorms across the state. The Charleston AP recorded a high temperature of 91 degrees on Friday, while cloudy skies in Florence kept the high to only 62 degrees. The state average temperature for the period was six degrees above normal. The state average rainfall for the period was 0.5 inch, leaving some operators complaining of drought-

like conditions. Others received adequate rainfall from the storms to spur along crop progress.

TENNESSEE: Days suitable for fieldwork 3. Topsoil moisture 1 percent short, 61 percent adequate, 38 percent surplus. Subsoil moisture 1 percent short, 70 percent adequate, 29 percent surplus. Farmers across Tennessee faced yet another week featuring multiple days of rain. Although storms were scattered and rainfall totals relatively low, conditions in most fields remained wet throughout the week. Temperatures averaged about 9 degrees above normal statewide last week. Precipitation levels were below normal across the state, but only slightly below normal in West Tennessee.

TEXAS: Areas of the Southern Low Plains, the Cross Timbers, and the Edwards Plateau received up to 3 inches of rainfall while the rest of the state observed little to no moisture. In some areas of the Plains, cotton land preparation continued, while in other areas recently-planted irrigated cotton made good progress. The threat of wildfires remained severe on rangeland and pastures across the state due to high winds and very dry conditions; however, the threat slightly declined due to increasing humidity in areas of the Cross Timbers and the Edwards Plateau.

VIRGINIA: Topsoil moisture 2 percent very short, 6 percent short, 75 percent adequate, 17 percent surplus. Subsoil moisture 2 percent very short, 11 percent short, 79 percent adequate, 8 percent surplus.

Domestic mill consumption of cotton averaged 13,300 running bales per day in March 2011, according to the Bureau of the Census. This was down from 14,000 bales per day a month earlier, but up from 12,500 bales in March last year. Consumption totaled 334,000 bales in March (five weeks), up from 280,000 bales the previous month (four weeks), and 312,000 bales in March last year (five weeks). Stocks of cotton at mills totaled 155,000 bales at the end of March 2011, according to the Bureau of the Census. This compares with 151,000 bales held a month earlier and 155,000 bales held at the end of March last year. Cotton in public storage totaled 6,058,000 bales at the end of March 2011, down from 8,379,000 bales the previous month and 7,752,000 bales at the end of March last year.

(Source: http://www.cattlenetwork.com/cattle-news/markets/grains/Weekly-Cotton-Review-122542-120975369.html?ref=369)