Weekly Cotton Market Review

MEMPHIS - Feb 2/07 - SNS -- The USDA released its latest review of cotton market conditions in the United States, reviewing conditions through the week ending 1 2.

Spot cotton quotations were almost unchanged from the previous reported 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
49.51 cents per pound for the week ending Thursday, February 1.  The weekly average was down from 50.07
cents reported last week and 52.19 cents the corresponding period a year ago.  Daily average quotations
ranged from a high of 49.84 cents on Friday, January 26 to a low of 49.21 cents on Tuesday, January 30.
Spot transactions reported in the Daily Spot Cotton Quotations for the week ending February 1 totaled
47,423 bales, compared with 45,166 last week and 42,591 a year ago.  Total spot transactions for the season
were 768,638 bales compared to 1,303,591 bales the corresponding week a year ago. The New York March
futures settlement price ended the week at 53.57 cents, compared to 54.37 cents reported last week.

USDA announced on February 1 that the Adjusted World Price (AWP) was 43.80 cents per pound for the
period February 2 through February 8, the Loan Deficiency Payment (LDP) rate for Upland cotton will be
8.20 cents per pound and the Extra Long Staple (ELS) Competitiveness Payment will be 0.00 cents per
pound.
							
Southeastern markets.   Spot cotton trading was slow.  Supplies and demand were moderate.  Average local
prices were lower.  Even-running lots containing color 21 and 31, leaf 2 and 3, staple 35, mike 37-49,
strength 27-29, and uniformity 79-81 sold for 53.75 cents per pound, FOB car/truck (Rule 5, compression
charges paid).  A moderate volume of color mostly 31, leaf 3, staple 35 and longer, mike 35-49, strength 27-
30, and uniformity 80-82 sold for 53.00 to 54.00 cents, same terms as above.     Mixed lots containing color
mostly 41, leaf 3 and 4, staple 34 and longer, mike 37-49, strength 27-29, and uniformity 80-82 sold for 300
to 350 points off New York March futures, same terms as above.  A moderate volume of color 31 and 41,
leaf 3 and 4, staple mostly 34 and longer, mike 43-52, strength 27-29, and uniformity 80-82 sold for around
450 points off New York March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid,
30 days free storage).  Mixed lots containing color mostly 51, leaf 3 and 4, staple 33 and longer, mike 37-49,
strength 26-28, and uniformity 80-82 sold for 575 to 625 points off New York March futures, same terms as
above.  No forward contracting of 2007-crop cotton was reported.
     Cold, wet conditions prevailed in southern Alabama, the Florida panhandle, and portions of southern
Georgia.  Precipitation amounts ranged from a trace to one inch.  Inclement weather returned late in the
period as a winter storm brought a mixture of freezing rain, sleet, and snow to areas of northern Alabama
and Georgia, the Carolinas, and Virginia.  Snowfall accumulations ranged from two to six inches. Ginning
neared completion in Alabama and the Carolinas.  Several gins continued to operate on a daily basis in
Georgia.

South central markets.  Spot cotton trading was inactive.  Available supplies were moderate.  Demand was
light.  Average local prices were lower.  Producers offered CCC-loan equities for two to four cents per
pound.  Few merchants were interested in bidding.  Inquiries from buyers for domestic and foreign mills
were light.  No sales were reported.
	Cotton ginning was rapidly nearing completion in the Memphis territory.  The Memphis Classing
office passed the 4-million bale mark.  The Missouri Department of Agriculture, at the request of the
Missouri Cotton Growers Organization, waived the late stalk destruction fee for the 2006-cotton crop.
	Extremely wet soil conditions delayed harvesting in parts of the state and prevented timely stalk
destruction. Stalk destruction would eliminate hibernation sites and any potential food sources available for
pests. Various sources reported cotton acreage was expected to decrease in the mid-south next season.
Estimates ranged from a decrease of 40 percent in Louisiana, 15-20 percent in Mississippi and Arkansas, to
around 10 percent in Missouri and Tennessee  according  to an article released January 26 by Delta Farm
Press.

Southwestern markets.  Spot cotton trading was slow in the East Texas/Oklahoma market and moderate in
the West Texas market.  Supplies were heavy.  Demand was good for color 31 and better, leaf 4 and better,
staple 34 and longer, and mike 35-52.  Average local prices were weak.  No forward contracting was
reported.  No domestic or export mill inquiries were reported.

A light volume of color 41 and better, leaf 4 and better, staple 35 and longer, and mike 37-52, and around 70
percent extraneous matter (bark) traded in west Texas at around 50.00 cents per pound, FOB car/truck
(compression charges not paid).  A light volume of color 31 and better, leaf 3, staple 36 and 37, mike 35-49
traded at around 53.25 cents, same terms as above.  A light volume of color 31 and 41, leaf mostly 3 and 4,
staple 33 and longer, and mike 45-52 traded at around 46.75 cents, same terms as above.  A light volume of
2005-crop cotton, color 22 and better, leaf mostly 2, staple 32-34, and mike 32-42 traded at around 45.00
cents, same terms as above.  A moderate volume of 2006 CCC-loan equities traded for one to three and one-
half cents.  A moderate volume of 2005 CCC-loan equities traded with no equity paid.  Ginning slowed, with
only the larger gins still operating.   Producers readied fields for spring planting.

A light volume of color mostly 31, leaf 3 and 4, staple 34-36,  and mike 35-42, and around 11 percent
extraneous matter (bark) traded in Oklahoma at around 48.00 cents per pound, FOB car/truck (compression
charges not paid).  A light volume of color mostly 31 and 41, leaf 3 and 4, staple 34 and longer, and mike
mostly 44-49 traded at around 50.25 cents, same terms as above.  A moderate volume of 2006 CCC-loan
equities traded for one to three cents.
	Ginning was winding down in Oklahoma with only a few gins still in operation.  Producers prepared
fields for spring planting.  The cotton-growing regions along the Gulf of Mexico received around one-quarter
to three-quarters of an inch of rain.  Producers had fields prepared for spring planting.  Planting could start in
the Rio Grande Valley as early as  February 1 and the Coastal Bend areas after February 15.

Western markets.  Spot cotton trading was inactive in the San Joaquin Valley (SJV).  Supplies and demand
were moderate.  Average local prices were lower.  Producer offerings were light.  Offerings of mixed lots,
with staple lengths no longer than 37, brought bids of less than 70.00 cents per pound, UD free, FOB
warehouse.  No sales were reported.  A general lack of interest from the shippers was reported by brokers.  No
domestic mill activity was reported.  The valley received around one-half of an inch of rainfall. Merchants
were shipping light volumes of cotton against previous contracts.  Reports indicated some producers
considered planting more corn and tomatoes this year.

Spot trading of Upland cotton was inactive in the Desert Southwest (DSW).  Supplies were moderate.
Demand was light.  Average local prices were lower.
     A southern Californian storm system moved into the DSW area.  Temperatures were seasonal in the
Phoenix area.  Winter-storm warnings and snow advisories were in effect in parts of southeastern New
Mexico and El Paso, Texas with approximately one-half of an inch of rainfall and light snow received.
Temperatures hovered around the mid to high 30s.    Producers had begun field preparations for spring
planting.  Water supply conditions improved in New Mexico and El Paso, Texas during the month.  Yuma,
Arizona producers were looking into planting more grain crops like wheat and barley as substitutes for corn.
New Mexico producers were considering planting more hay and silage for dairy cattle consumption.

American Pima spot cotton trading was slow.  Supplies and demand were moderate.  Foreign mill inquiries
were steady.  Producer offerings were moderate.  Average local prices were lower.  Mixed lots of SJV Pima,
mostly color 2 and better, leaf 2 and better, staple 48 and longer, mike 27-49, and strength averaging 38.0
sold for around 91.00 cents per pound, UD free, FOB warehouse.  Ginning continued in the SJV and New
Mexico.

Textile mill report.    Domestic mill buyers purchased a moderate volume of color 42, leaf 5 and better, and
staple 34 and longer for February through March delivery.  Domestic mill inquiries were light.  Demand was
best for any discounted cotton.  Most mills operated on a five-to-seven day schedule.  Demand through
export channels was moderate.  Buyers in Indonesia inquired for a moderate volume of color 41, leaf 4, and
staple 34 for February/March shipment.  Agents in Japan inquired for a moderate volume of color 21, leaf 2,
and staple 37 for March through June shipment.  Buyers in Taiwan inquired for a moderate volume of color
31, leaf 3, and staple 34 and longer for February through June shipment.  No sales were reported.

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STAT News Service