Spot quotations averaged 147 points higher than the previous week, according to the USDA, Agricultural Marketing Service’s Cotton and Tobacco Program. Quotations for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, and uniformity 81.0-81.9) in the seven designated markets averaged 59.84 cents per pound for the week ending Thursday, September 17, 2020.
The weekly average was up from 58.37 last week and from 58.11 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 58.77 cents Friday, September 11 to a high of 60.25 cents Monday, September 14.
Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 17 totaled 33,704 bales. This compares to 10,399 reported last week and 27,518 spot transactions reported the corresponding week a year ago.
Total spot transactions for the season were 158,973 bales compared to 91,746 bales the corresponding week a year ago. The ICE December settlement price ended the week at 65.85 cents, compared to 64.81 cents last week.
USDA ANNOUNCES SPECIAL IMPORT QUOTA #22 FOR UPLAND COTTON September 17, 2020
The Department of Agriculture’s Commodity Credit Corporation announced a special import quota for upland cotton that permits importation of a quantity of upland cotton equal to one week’s domestic mill use.
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The quota will be established on September 24, 2020, allowing importation of 2,342,753 kilograms (10,760 bales of 480-lbs) of upland cotton. Quota number 22 will be established as of September 24, 2020 and will apply to upland cotton purchased not later than December 22, 2020 and entered into the U.S. not later than March 22, 2021.
The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period May 2020 through July 2020, the most recent three months for which data are available.
Future quotas, in addition to the quantity announced, will be established if price conditions warrant.
Southeastern Markets Regional Summary
Spot cotton trading was slow. Supplies and producer offerings were light. Demand were light. Average local spot prices were higher. Trading of CCC-loan equities was slow. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains.
Hurricane Sally made landfall as a category 2 hurricane near the Alabama-Florida line in the early morning hours mid-week. Maximum sustained winds were 105 mph and hundreds of thousands of homes and businesses remained without power late in the period. The storm ripped off roofs and flooded streets as it dumped more than 30 inches of torrential rainfall on some coastal areas in a four-hour period.
Sally was downgraded to a tropical depression as it moved inland and slowly tracked northeast, where it brought several inches of moisture to areas throughout Alabama and Georgia. Flash flood watches and river flood warnings were issued across the lower Southeastern region as heavy rainfall engorged rivers and streams. The slow-moving storm produced whipping winds which blew plants around and tangled stems.
Bolls were cracking open and producers were concerned about boll-rot, diminished quality, and yield losses in fields that had already received heavy precipitation in recent weeks. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 14, cotton bolls opening had reached 55 percent in Alabama and 52 percent in Georgia.
A mix of sun and clouds with scattered showers was observed across the upper Southeastern region before the remnants of Hurricane Sally drifted across the Carolinas and Virginia late in the week. Cooler daytime temperatures prevailed with highs mostly in the upper 70s to low 80s. Flash flood watches and river flood warnings were in effect in some areas as widespread thunderstorms brought several inches of precipitation late in the period.
Fieldwork was at a standstill due to wet conditions during the week. Crop maturity continued to lag behind historical averages across the upper Southeast; producers would welcome a period of dry and sunny weather to invigorate plants and help dry water-logged soils. According to the NASS Crop Progress report released September 14, cotton bolls opening had reached 39 percent in North Carolina, 34 in Virginia, and 20 percent in South Carolina.
Inquiries from domestic mill buyers were very light. No sales were reported. Reports indicated most mills have covered their raw cotton needs through the end of the year. Although some mills have seen incremental increases in finished product demand, mills continued to operate at reduced capacity due to the COVID-19 Pandemic. The undertone from mill buyers remained cautious.
Mills continued to produce personal protective equipment for frontline workers and military supplies in response to the COVID-19 Pandemic. Demand through export channels remained light. Agents for mills throughout the Far East continued to inquire for attractively priced cotton. Recent purchases by China were seen as efforts to increase China’s state reserve stocks rather than due to finished product demand.
- A light volume of color 41 and 51, leaf 2-4, staple 32-35, mike 43-52, strength 25-30, and uniformity 79-82 sold for around 1000 points off ICE December futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage.)
- A moderate volume of color mostly 41 and 52, leaf 2-4, staple 33-37, mike 43-52, strength 27-30, and uniformity 80-83 sold for around 1200 points off ICE December futures, same terms as above.
- A heavy volume 2019 CCC-loan equity sold for around 8.00 cents per pound.
South Central Markets Regional Summary
Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy.
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Mostly clear skies and warm temperatures prevailed during the week. Daytime temperatures were in the 80s. Overnight lows were in the 60s and low 70s. The crop made good progress under fair conditions. Producers were concerned about the effect the cold front that is expected to enter the region this weekend will have on overall yields, as many fields are still maturing. Bolls were rapidly opening and defoliation had begun on early-planted and dryland acres.
Harvesting was expected to get underway within a week in southern areas. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on September 14, bolls opening had reached 84 percent completed in Arkansas, 31 in Missouri, and 29 percent Tennessee. The figures for Missouri and Tennessee were about 2 weeks behind the 5-year average.
Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact economic activity around the world.
Hurricane Sally brought heavy rainfall, which measured up to 7 inches in coastal areas of Mississippi, when it struck the Alabama Gulf Coast as a slow-moving, category 2 storm on Tuesday, September 15. Little-to-no crop damage was reported in Mississippi as the brunt of the storm moved sluggishly across the cotton-producing areas in the Southeastern region. Daytime temperatures were mostly in the 80s to low 90s. Overnight lows were in the 60s and 70s.
Harvest activities progressed steadily under good conditions. Defoliation expanded generally throughout the region, and cotton harvesting gained momentum. Cotton pressing operations were underway, but the lack of skilled workers was of concern to some ginners. The Rayville Classing Office began operating one shift as annual classing operations were initiated.
According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on September 14, bolls opening had reached 83 percent completed in Louisiana and 54 percent in Mississippi; cotton harvesting was reported at 2 percent in Louisiana and 1 percent in Mississippi.
- No trading activity was reported.
- No trading activity was reported.
Southwestern Markets Regional Summary
Spot cotton trading was active. Supplies and producer offerings were moderate. Demand was light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were light. The COVID-19 Pandemic continued to influence market uncertainty and affect global cotton demand.
Ginning neared completion in the Rio Grande Valley, and most gins were finished. The season was cut short due to major crop damage sustained from Hurricane Hannah. Harvesting was estimated at 90 percent completed in the Upper Coast, according to industry sources. Ginning was expected to continue until the end of October. Producers were encouraged with above average yields.
Only late planted fields in south Texas remained to be harvested. Gins continued processing modules on the gin yards. Recent heavy rainfall in the Blackland Prairies sidelined fieldwork until the soils firm. Careful monitoring of stands was underway for regrowth and sprouting. Ginning continued.
In Kansas, progress was slowed from the cold front that moved through the previous period. Sunshine prevailed with occasional foggy conditions. Daytime temperature highs were in the upper 60s to low 80s, and overnight lows were in the 50s.
In Oklahoma, light rainfall was welcomed, but arrived too late to help the crop advance. Some fields had been defoliated, but the main target date is next week, according to industry experts. The cold front earlier in September slowed progress and put the crop behind normal. According to the National Agricultural Statistics Service’s Crop Progress report released on September 14, bolls opening was at 35 percent, down 10 points from last year, and near the 34 percent average. Virtual meetings and field days were held.
Spot cotton trading was active. Supplies were moderate. Producer offerings were light. Demand was light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Foreign inquiries were light. The Loan Deficiency Payment remains in effect. The COVID-19 Pandemic continued to impact commodity markets and global cotton demand.
Most irrigation pivots were turned off and drip irrigation was rapidly drawing to an end. Bolls had begun to crack open. Hot, sunny conditions prevailed with daytime temperature highs in the upper 70s to upper 80s and overnight lows in the mid-50s to low 60s. Spotty showers brought light rainfall to isolated locations, which hampered fieldwork in those places due to soggy conditions. A few fully matured fields were defoliated on the High Plains.
- In Texas, a heavy volume of new-crop cotton mostly color 31, leaf 2 and 3, staple 37, mike 39-49, strength 29-36, and uniformity 79-83 sold for around 64.75 cents per pound, FOB warehouse (compression charges not paid).
- A heavy volume of new-crop lots containing mostly color 21 and 31, leaf 2-4, staple 36-38, mike 40-50, strength 30-33, and uniformity 79-83 sold for 63.25 to 63.50 cents, same terms as above.
- In Oklahoma, a light volume of 2019-crop cotton mostly color 41, leaf 4 and 5, staple 35 and longer, mike 39-49, strength 29-33, uniformity 79-82, and 50 percent extraneous matter sold for around 57.75 cents, FOB car/truck (compression charges not paid).
- A heavy volume of 2019 CCC-loan equities traded for 0.00 to 9.75 cents.
- A moderate volume of 2019-crop cotton mostly color 22 and better, leaf 2 and 3, staple 35 and longer, mike 30-34, strength 28-31, uniformity 78-82, and 25 percent extraneous matter sold for around 51.00 cents per pound, FOB car/truck (compression charges not paid).
- An even-running lot containing a light volume of cotton mostly color 21, leaf 3, staple 35 and longer, mike averaging 28.9, strength averaging 29.9, uniformity averaging 80.2, with 50 percent extraneous matter sold for around 46.75 cents, same terms as above.
- A light volume of 2019 CCC-loan equities traded for 0.00 to 7.25 cents.
Western Markets Regional Summary
Desert Southwest (DSW)
Spot cotton trading was inactive. Supplies were light. Demand was light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. The Loan Deficiency Payment remained in effect. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light for 2019-crop cotton. The COVID-19 Pandemic continued to adversely impact the U.S. economy, market activity, and demand for raw cotton.
Heat units helped open the bolls at the tops of the plants in eastern and central Arizona. The crop made good progress with daytime temperature highs in the low 80s to upper 90s. Harvesting neared completion in Yuma, AZ and ginning continued. Bolls were opening in New Mexico and El Paso, TX. Defoliation was expected to begin soon.
Producers in New Mexico were encouraged as the crop advanced normally. Average to above average yields were expected, depending on location. Irrigation was terminated around Artesia and Carlsbad, NM. Ginning was expected to begin in late October for NM and El Paso, TX.
San Joaquin Valley (SJV)
Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light. The Loan Deficiency Payment remained in effect. The COVID-19 Pandemic continued to impact markets.
In the SJV, daytime high temperatures were in the upper 80s to low 110s, and overnight lows were in the upper 50s to 80s. Smokey conditions from wildfires continued to blanket the SJV. The crop was finishing quickly. Preparations were underway to commence applying defoliants and boll openers in the near-term. Late season insect pressure was light and below treatable levels.
The crop was rated fair to good, according to the National Agricultural Statistics Service’s Crop Progress report published on September 14. Bolls opening was at 20 percent, near 22 last year, and the behind the 28 percent five-year average.
American Pima (AP)
Spot cotton trading was inactive. Supplies were moderate. Demand was light. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. The Pima Competitive Payment remained at 7.00 cents. The COVID-19 Pandemic continued to negatively influence global cotton demand and disrupt supply chains. The Foreign Agricultural Service’s U.S. Export Sales report for week ending September 10 showed 28,000 bales of new sales.
In the San Joaquin Valley, bolls were cracking open. Final irrigation was applied to some fields. Wildfires made air quality poor and hazy atmospheric conditions persisted all week long. Harvesting neared completion in Yuma, AZ, with daytime temperatures in the mid-90s to upper 110s. Overnight lows were in the upper 60s and 70s.
A few stands were treated with defoliants in eastern Arizona. Fields in central Arizona were finishing the maturation process. Defoliation activities were nearing. The crop matured in New Mexico and bolls were open to the top of the plants. Producers in El Paso, TX and New Mexico were expecting above average yields and optimism was high.
- No trading activity was reported.
San Joaquin Valley
- No trading activity was reported.
- No trading activity was reported.