Weekly Cotton Market Review

MEMPHIS - May 23/08 - SNS -- The USDA released its latest review of cotton market conditions in the United States, reviewing conditions through the week ending 4 23.

May 23, 2008

Spot cotton quotations averaged 73 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 62.00 cents per
pound for the week ended Thursday, May 22.  The weekly average was up from 61.27 cents reported last week
and 45.27 cents reported the corresponding period a year ago.  Daily average quotations ranged from a high of
62.54 cents on Friday, May 16 to a low of 61.28 cents on Thursday, May 22.  Spot transactions reported in the
Daily Spot Cotton Quotations for the week ended May 22 totaled 23,153 bales compared with 10,426 last week
and 72,748 a year ago.  Total spot transactions for the season were 1,589,640 bales compared to 1,517,009 bales
the corresponding week a year ago.  The ICE July futures settlement prices ended the week at 70.98 cents
compared to 70.13 cents reported last week.

Southeastern markets.  Spot cotton trading was light.  Producer offerings were moderate.  Demand was
moderate.  Average local prices were higher.  Supplies were moderate.  Trading of CCC-loan equities was
slow.  No forward contracting was reported during the period.

>	A moderate volume of color mostly 31 and 41, leaf 3 and 4, staple 33 and 34, mike 43-52,
strength 27-29, and uniformity 78-80 traded at around 675 points off ICE July futures, FOB
car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
>	Mixed lots containing color mostly 42 and better, leaf 5 and better, staple 32 and longer, mike
48-52, strength 27-29, and uniformity 78-80 sold for 62.25 cents per pound, FOB car/truck
(Rule 5, compression charges paid).
>	A light volume of CCC-loan equities traded at around six and one-quarter cents per pound.

Scattered thunderstorms pushed through north Alabama, central Georgia, and the Carolinas during the period.
Rainfall accumulations were between one-half of an inch to one and one-quarter inches.  Some localized
replanting may take place in some fields in South Carolina where downpours were the heaviest.  Most of the
major cotton growing regions of south Alabama and south Georgia missed most of the significant
precipitation.  Planting activities remained underway throughout the region.  Local experts reported that
glyphosate-resistant Palmer amaranth (pigweed) was now confirmed in 20 Georgia counties and producers
were encouraged to contact their local county extension agents for assistance with weed management issues.

South Central markets.  Spot cotton trading was inactive.  Available supplies were light.  Demand was light.
Average local spot prices were higher.  Trading of CCC-loan equities was slow.  Inquiries from
representatives of domestic and foreign mills were moderate.  No sales were reported.

>	A moderate volume of CCC-loan equities traded for around four and one-half cents.

Clear skies allowed cotton sowing to expand throughout the region.  Some producers were waiting for the
wheat harvest to conclude so they could follow with cotton.  According the NASS Crop Progress report for
the week ending May 18, 89 percent of the crop was planted in Louisiana, 78 in Missouri, 67 in Arkansas, 37
in Mississippi, and 24 in Tennessee.  Cooler than normal temperatures hindered the development of emerged
cotton plants.   The accumulation of heat units lagged well behind normal for this time of the year.  Producers
were carefully monitoring fields for thrips and other pests.   Producers in Louisiana were making over-the-top
applications of glyphosate on emerged cotton plants.  The cotton-producing area of northeastern Louisiana
remained abnormally dry.

Southwestern markets. Spot cotton trading was inactive in the East Texas/Oklahoma market and slow in the
West Texas market.  Trading of CCC-loan equities was slow in the east Texas/Oklahoma market and
moderate in the Texas market.  Supplies were moderate.  Demand was light for color 31 and better, leaf 3 and
better, staple 34 and longer, and mike 30-49.  Average local spot prices for east Texas/Oklahoma and west
Texas were firm.  No domestic or export mill inquiries were reported.

East Texas/Oklahoma

>	A light volume of CCC-loan equities traded in Oklahoma for one to three and one-quarter cents
per pound.

Squaring increased in the Rio Grande Valley (RGV) and Coastal Bend districts and some blooms had been
observed on some of the earlier planted RGV plants.  Early in the period, the Rio Grande Valley received
around two inches of rain and the Coastal Bend around one inch.  The South Texas crop was in desperate
need of additional moisture.  Producers with irrigated acres applied water as needed.  According to the NASS
Crop Progress report for the week ending May 18, 36 percent of the Texas crop had been planted, 37 in
Oklahoma, and 5 percent in Kansas.

West Texas

>	A light volume of color 31 and better, leaf 4 and better, mike 39-51, staple 32 and longer,
strength 28-33, and uniformity 79-80 traded at around 64.50 cents per pound, FOB car/truck
(compression charges not paid).
>	A light volume of color 31 and better, leaf 4 and better, mike mostly 33-38, staple 33 and
longer, strength 25-32, and uniformity 77-82 traded at around 61.00 cents, same terms as
above.
>	A moderate volume of old-crop cotton, color mostly 31 and better, leaf 5 and better, staple 33
and longer, mike mostly 33-46, strength 21-36, uniformity 75-85, with around 25 percent
extraneous matter (bark) traded at around 61.00 to 62.50 cents, same terms as above.
>	A moderate volume of CCC-loan equities traded at four and one-quarter to five and one-half
cents.

Hot, dry weather conditions allowed wet fields to dry and planting to increase.  Local estimates had the area
around Lubbock less than 15 percent planted.  Temperatures across the region were in the high 80s and 90s
for most of the period.

Western markets.  Spot cotton trading was inactive in the San Joaquin Valley (SJV).   Supplies and demand
were light.  Average local prices were steady.  No forward contracting or domestic mill activity was reported.
A very light volume of cotton remained in producer hands.  All foreign mill inquiries were for prompt
shipment.  Agents for mills in the Far East purchased a light volume of cotton for prompt shipment.  A
record-breaking heat wave on the west coast produced temperatures over 100 degrees early in the reporting
period.  The heat wave was broken when a late season cold front brought dramatic temperature changes of 25
to 30 degrees lower late in the period.  The front produced dust storms and high wind warnings throughout
the central valley.  Industry experts rated the current crop progress as fair to good.  Most indicated that
seasonal weather patterns needed to return for plant progress to catch up to normal.  The California cotton
industry was concerned about increased diesel fuel costs along with other production costs.  Producers were
conserving fuel by limiting the number of tractor passes through the fields and by combining tillage
operations.

Spot trading of Upland cotton was slow in the Desert Southwest (DSW).  Supplies were moderate.  Demand
was light.  Average local prices were steady.  No forward contracting or domestic mill activity was reported.
Record-breaking high temperatures of 110 degrees were recorded in the Phoenix metro area early in the
period.  Central and western cotton producers were encouraged to monitor soil moisture as extremely dry
conditions may require more irrigation.   The New Mexico and El Paso, Texas areas reported temperatures in
the high 90s to low 100s.  Wind advisories were in effect with gusts up to 60 mph in New Mexico cotton
growing areas.  Crop progress was rated good.

American Pima spot cotton trading was inactive.  Supplies and demand were light.  Guaranteed minimum
price contracts for SJV Pima were at 110.00 cents per pound, UD free, FOB warehouse.  No new sales were
reported.  Interest from foreign mills was steady.  Inquiries for new-crop were light with few sales reported.
Spring weather conditions remained dry.  The SJV had three straight days of over 100 degree temperatures,
which broke previous records set in May early in the period.  A cold front brought cooler temperatures
(around 70 to 75 degrees) and gusty winds (up to 35 mph).  Crop progress was fair to good.

Textile mill report.  Buyers for domestic purchased a moderate volume of color 42, leaf 5, and staple 34 for
prompt delivery.  Mill buyers also inquired for a moderate volume of color 41, leaf 3, and staple 35 for July
through November delivery.  No additional sales were reported.  Most mills operated on a five to seven day
production schedule.  Inquiries through export channels were moderate.  Demand was best throughout the Far
East for any discounted styles of cotton.

Domestic mill consumption of cotton averaged 17,700 running bales per day in April 2008, according to the
Bureau of the Census.  This was up from 16,100 bales per day a month earlier but down from 18,400 bales in
April last year.  Consumption totaled 355,000 bales in April (four weeks), down from 402,000 bales the
previous month (four weeks) and 371,000 bales in April last year (four weeks).


Stocks of cotton at mills totaled 150,000 bales at the end of April 2008 according to the Bureau of the
Census. This compares with 175,000 bales held a month earlier and 233,000 bales held at the end of April
last year.  Cotton in public storage totaled 13,001,000 bales at the end of April, down from 14,748,000 bales
the previous month and 13,908,000 bales at the end of April last year.

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STAT News Service