Jernigan Global

The 2018/19 season will be remembered as the year of the Strict Low Middling, the US has enjoyed two back to back years with excellent color grades, of course the low mike issue in West Texas impacted overall quality in 2017/18.  In 2017 67.2% of the US crop was Middling and above color grades with only 21.1% falling to a 41 or Strict Low Middling color grade and in 2016 69.8% of the US crop classed Middling color grade or better and only 20% fell to SLM. Last week 956,234 bales were classed and over 70% of the volume was 41 or Strict Low Middling or lower color grades. Even Arizona was impacted by two major rain events after the crop was 100% open and still in the field. 50.6% of the cotton classed last week in AZ was 41/51 color grades which illustrates the extent the rains have impacted all regions but California.  The issues with color grades are slowing export trade, shipping of existing orders and will lead to some replacement with Brazilian. Putting all those issues a side; it also means the US will face heavy competition from Greek and Turkish cotton until those supplies sell out.

The 7-day outlook suggests West Texas will be mostly dry which may allow for cotton to bleach out the color grades for some improvement. Harvest will be in full swing across that region this week. Rain will be possible in much of the Mid-South and Southeast. The quality of the Georgia crop which is still left is not yet known.