Weekly Cotton Market Review – USDA

Defoliated cotton with unopen top bolls. Photo: University of Tennessee

Average spot quotations were up 209 points from 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 68.19 cents per pound for the week ending Thursday, November 26, 2020. The weekly average was up from 66.10 last week and 60.83 cents reported the corresponding period a year ago.

Daily average quotations ranged from a season high of 68.91 cents Monday, November 23 to a low of 67.57 cents Wednesday, November 25. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 25 totaled 83,328 bales. This compares to 55,843 reported last week and 99,595 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 479,062 bales compared to 407,176 bales the corresponding week a year ago. The ICE March settlement price ended the week at 72.36 cents, compared to 71.67 cents last week.

Spot cotton trading was moderate. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were higher. Trading of CCC-loan equities was inactive. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains.Sunny to partly cloudy conditions were observed across the lower Southeast region during the period. Daytime high temperatures were in the upper 60s to upper 70s. Harvesting ramped up at a good pace as ideal weather conditions allowed fieldwork to advance uninterrupted.

Producers continued to report lower yields and reduced qualities in areas that received excessive moisture during the fall. Backlogs of modules continued to accumulate on gin yards and ginning continued uninterrupted. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released November 23, cotton harvested had reached 81 percent in Alabama and 73 percent in Georgia; both figures were behind the NASS five-year average.A similar weather pattern settled over the upper Southeast as mostly sunny to partly cloudy weather prevailed. Seasonably cool daytime high temperatures varied from the low 60s to low 70s.

In North Carolina, field activities advanced at a slower pace in areas that received heavy moisture last week and where fields remained too soggy to support equipment for several days. In South Carolina and Virginia, harvesting progressed in mature fields as dry conditions allowed. Ginning continued uninterrupted; backlogs of modules continued to accumulate on gin yards. According to the NASS Crop Progress report released November 23, cotton harvested had reached 68 percent completed in South Carolina, 64 in North Carolina, and 49 percent completed in Virginia; figures well behind the NASS five-year average.

Textile Mill

Buyers for domestic mills purchased a moderate volume of color 41, leaf 3 and 4, and staple 34-36 for January through October 2021 delivery. Mill buyers also inquired for a moderate volume of color 41-51, leaf 5 and better, and staple 32 and longer for January through October delivery. No additional sales were reported. Reports indicated that mills continued to incrementally increase operating schedules as warranted by increased finished product demand. Yarn demand was good. Mills continued to produce personal protective equipment for frontline workers and military supplies.

Demand through export channels was light. Agents for mills in Turkey purchased a mixed lot recap containing predominately color 51, leaf 5 and better, and staple 35 for nearby shipment. Vietnamese mill buyers purchased a moderate volume of color 31, leaf 3, and staple 37 for nearby shipment.

Trading

•A light volume even-running lot containing color 31, leaf 3 and 4, staple 37, mike 39-42, strength 28-30, and uniformity 81-82 sold for around 77.25 cents per pound, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
•Similar even-running lots containing color 31 and 41 and approximately 25 percent seed coat fragments sold for around 73.50 cents, same terms as above.
•A moderate volume of color 41 and 42, leaf 3-5, staple mostly 36 and 37, mike 43-49, strength 28-30, and uniformity 79-81 sold for around 71.50 cents, same terms as above.
•A light volume of 2019-crop cotton, color 51, leaf 3, staple 35 and 36, mike 43-49, strength averaging 27, and uniformity 81-82 sold for around 53.00 cents, same terms as above.
•Moderate volume mixed lots containing color mostly 41 and 51, leaf 3 and 4, staple 35-38, mike 43-52, strength 28-32, and uniformity 80-82 sold for around 70.00 cents, FOB car/truck (Rule 5, compression charges paid).

North Delta

Spot cotton trading was slow. Supplies of available cotton were moderate. Demand was moderate. 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 and daily infection rates were steadily increasing in many areas.Warm daytime temperatures dominated the weather pattern during the week. Highs were generally in the 60s. Cool overnight lows were in the 40s. Light amounts of precipitation were reported during the period.
Field activities were winding down under good conditions as cotton harvesting and fall fieldwork neared completion. Producers reported that they were generally satisfied with yields and quality of the crop. According to the National Agricultural Statistics Service’s Crop Progress report released on November 23, cotton harvested had reached 99 percent completed in Arkansas, 91 in Missouri, and 90 percent in Tennessee. These figures remained near the five-year average in Arkansas and Tennessee, and about two weeks behind average in Missouri.

South Delta

Spot cotton trading was inactive. Supplies of available cotton were moderate. Demand was 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 and daily infection rates were steadily increasing in many areas.Seasonably mild daytime temperatures prevailed during the week. Highs were in the low 70s. Overnight lows were in the 40s to 60s. No rainfall was reported during the week.
Field activities progressed rapidly under good conditions as cotton harvesting was completed, stalks shredded, and fields worked for next year’s crops. Producers reported that they were generally happy with the yield results and the upward movement of prices. According to the National Agricultural Statistics Service’s Crop Progress report released on November 23, harvesting advanced slowly and reached 99 percent completed in Louisiana and 95 percent in Mississippi. Harvesting was near the NASS five-year average in both states as harvesting nears completion in all areas.

Trading

North Delta

•A light volume of color 41 and better, leaf 4 and better, staple 35 and longer, mike 40-50, strength 27-30, and uniformity 79-83 traded for around 75.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

South Delta

•No trading activity was reported.

East Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was good. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was moderate. Foreign inquiries were heavy. Interest was best from China, Pakistan, and Turkey. The COVID-19 Pandemic continued to influence market uncertainty and impact global cotton demand. Ginning continued in the Coastal Bend, the Upper Coast, and in the Winter Garden area. Intermittent rainfall brought a light amount of rain to parts of south Texas.
Most gins will close for the Thanksgiving holiday. A few more gins finished for the season. In the northern Blackland Prairies, drizzle and rain moved in mid-week and disrupted final harvesting activities. Stalks were shredded behind the harvesters at some farms. Fields were plowed and fertilizer applied. Ginning continued at the gins that were offering pressing service.In Kansas, good harvesting weather turned to light rain and hail that stalled harvesting activities. A cold front brought 50 mile per hour winds. Gins closed for several hours until the winds diminished. Harvesting was estimated at around 25 percent completed.
In Oklahoma, harvest quickly approached the end. Irrigated cotton was 99 percent completed and dryland was around 80 percent harvested in the southwestern counties. Stalks were shredded and some fields were tilled. Fertilizer applications began.

West Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was very good. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was moderate. Foreign inquiries were heavy. Interest was best from China, Pakistan, and Turkey. The COVID-19 Pandemic continued to impact commodity markets and global cotton demand. Infection spikes continued to pressure local medical institutions and resources.

AgFax Weed Solutions


A cold front pushed through the area early in the reporting period and brought a light amount of rainfall to some areas. The precipitation was much needed to alleviate drought conditions and nourish the soil. More rainfall would have been beneficial. Foggy, windy conditions mid-week stalled field activities and caused some gins to halt operations to observe fire safety standards. Harvesting is estimated at 90 percent completed on the High Plains, and many producers were able to finish harvesting ahead of the storm and before the Thanksgiving holiday.Harvesting is expanding in the Rolling Plains.

Trading

East Texas

•In Texas, an even-running lot containing a moderate volume of mostly color 31, leaf 2 and 3, staple 38 and longer, mike 39-48, strength 29-34, and uniformity 81-83 sold for around 72.50 cents per pound, FOB warehouse (compression charges not paid).
•In Oklahoma, a heavy volume of cotton mostly color 21, leaf 3 and better, staple 37 and 38, mike 34-44, strength 29-34, and uniformity 79-82 sold for around 74.00 cents, FOB car/truck (compression charges not paid).
•A moderate volume of cotton mostly color 21, leaf 2, staple 37 and longer, mike 35-43, strength 27-33, and uniformity 78-83 sold for around 72.75 cents, same terms as above.
•A moderate volume of CCC-loan equities traded for 2.75 to 8.50 cents.West Texas•Even-running lots containing a heavy volume of cotton mostly color 11 and 21, leaf 1 and 2, staple 36 and longer, mike 30-47, strength 28-32, and uniformity 78-81 sold for 71.00 to 71.75 cents per pound, FOB car/truck (compression charges not paid).
•A heavy volume mixed lot mostly color 21 and 31, leaf 2 and 3, staple 34-37, mike 38-49, strength 26-31, and uniformity 77-81 sold for around 70.25 cents, same terms as above.
•A heavy volume of mostly color 31 and better, leaf 3-5, staple 35-38, mike averaging 41.4, strength 27-32, uniformity 78-81, and 75 percent extraneous matter sold for around 67.50 cents, same terms as above.
•A moderate volume of CCC-loan equities traded for 0.25 to 7.50 cents

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and producer offerings were moderate. Demand was light. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. The COVID-19 Pandemic continues to pressure the U.S. economy. A mix of sun and clouds kept temperatures in the high 70s to low 80s in central Arizona. All Arizona gins were operating at capacity.
Field activities consisted of harvesting, shredding stalks, and preparing fields for winter plantings. Excellent weather conditions allowed harvesting and ginning to advance in New Mexico and El Paso, TX. Daytime high temperatures were in the 60s and 70s. Most DSW gins planned on closing for one to two days for Thanksgiving. Warehouses were busying shipping cotton. San Joaquin Valley (SJV)Spot cotton trading was inactive. Supplies and demand were light. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. Average local spot prices were higher.
The COVID-19 Pandemic continues to negatively impact the U.S. economy. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Foggy mornings were prevalent in the week. Daytime high temperatures were in the 60s. Overnight lows were in the 30s and 40s. Freeze warnings were in effect throughout the Valley. Harvesting was virtually completed. Producers shredded stalks in compliance with the California Pink bollworm program. Ginning continued with some taking one to two days off for Thanksgiving celebrations. One California gin just started operations in the period. Warehouses were busy shipping cotton.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2019-crop were light and were moderate for 2020-crop cotton. Demand was moderate. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate.
COVID-19 Pandemic slowed U.S. economic recovery and the progress of global economies. Cold temperatures descended into the Far West early in the reporting period. Far West daytime high temperatures were in the 60s to 80s. Overnight lows were in the 30s to low 50s. No rainfall was recorded in the period. In the San Joaquin Valley of California, early morning fog was prevalent. Harvesting advanced throughout the region. A backlog of modules kept ginning steady. Most gins in the region will close one day for Thanksgiving, with a couple of gins taking two days off. One SJV gin closed voluntarily for one week, due to COVID-19 exposure. They will resume operations next week.

Trading

Desert Southwest

•No trading activity was reported.

San Joaquin Valley

•No trading activity was reported.

American Pima

•No trading activity was reported.



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