Spot Cotton Quotations: Their Relation to Spot Values and to Average Differentials

Excerpts from the report: Spot cotton quotations are issued in each of 15 designated markets. These markets are Greenville, Charleston, Augusta, Atlanta, and Montgomery in the Southeast; New Orleans, Little Rock, Memphis, and Greenwood in the South Central Region; Dallas, Houston, Galveston, and Lubbock in the Southwest; and Fresno and Phoenix in the West. The quotations are used extensively by individuals and groups in the merchandising of cotton, and by U.S. Government agencies in administering price support and sales programs for cotton. This study was undertaken for two reasons. First, all phases of the cotton marketing system are continuously changing, but nearly 10 years have elapsed since a study was made of the accuracy of the official spot quotations. Second, in recent years, public interest in the spot quotations system has continued to mount because of the increasing dependence upon the quotations as a basis for the Government price support and sales program for cotton. The specific objectives of the study were (1) to determine the relationships between the official spot quotations and spot values for cotton in each designated market during the seasons of 1959-60 and 1960-61, and (2) to determine the relationships between the differentials quoted and the differentials paid in terms of averages for groups of markets and for extended periods of time.