Weekly Cotton Market Review – USDA

Average spot quotations were down 6 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 77.35 cents per pound for the week ending Thursday, January 28, 2021.

The weekly average was down from 77.41 cents last week, but up from 65.21 reported the corresponding period a year ago. Daily average quotations ranged from a high of 78.40 cents Monday, January 25 to a low of 76.00 cents Thursday, January 28.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended January 28 totaled 33,528 bales. This compares to 44,177 reported last week and 62,139 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,138,195 bales compared to 1,216,688 bales the corresponding week a year ago. The ICE March settlement price ended the week at 79.93 cents, compared to 82.57 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #15 FOR UPLAND COTTON January 28, 2021

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. The quota will be established on February 4, 2021, allowing importation of 9,464,255 kilograms (43,469 bales of 480-lbs) of upland cotton.

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Quota number 15 will be established as of February 4, 2021 and will apply to upland cotton purchased not later than May 4, 2021 and entered into the U.S. not later than August 2, 2021. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period September 2020 through November 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 moderate. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were steady. Trading of CCC-loan equities was inactive. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains.

Mostly cloudy to overcast conditions prevailed across the lower Southeast during most of the period. Daytime high temperatures varied from the mid-50s to mid-70s. Widespread thundershowers brought moderate precipitation to areas throughout Alabama, the Florida Panhandle, and Georgia. Weekly accumulated precipitation totals measured from 1 to 4 inches of moisture.

Fieldwork was at a standstill due to the wet weather and soggy conditions. Ginning was winding down; many smaller gins had finished pressing operations for the season or remained on gin days. Producers, ginners, and industry members attended the Georgia Cotton Commission’s virtual annual meeting.

Sunny and clear conditions entering the period gave way to overcast and wet weather during the week. Daytime high temperatures were in the 40s in Virginia, but were slightly warmer in the low to mid-50s in the Carolinas. Widespread thunderstorms brought moisture to areas throughout the upper Southeast. Weekly accumulated precipitation totals measured from around 1 to 2 inches. Field activities were at a standstill due to wet and soggy fields. Many gins had finished pressing operations for the season or gone to gin days.

Textile Mill

Buyers for domestic mills purchased a moderate volume of color 41, leaf 3, and staple 36 for April through November delivery. Mill buyers also made initial inquiries for 2021-crop cotton, color 41, leaf 4, and staple 34 and longer for fourth quarter 2021 through first quarter 2022 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 moderate. Vietnamese mill buyers purchased a moderate volume of color 31, leaf 3, and staple 35 for nearby shipment. Agents for mills in China and Indonesia inquired for color 41, leaf 3, and staple 36 for nearby shipment. No additional sales were reported.

Trading

  • A moderate volume of color 31 and 41, leaf 2-4, staple 36-38, mike 37-47, strength 27-30, and uniformity 80-82 sold for around 150 points on ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
  • A moderate volume of color mostly 41, leaf 3 and 4, staple 36-38, mike 37-47, strength 28-31,uniformity 81-83, and 50 percent seed coat fragments sold for around 150 points off ICE March futures, same terms as above.

South Central Markets Regional Summary

North Delta

Spot cotton trading was slow. Supplies of available cotton were moderate. Demand was light. Average local spot prices were steady. Trading of CCC-loan equities was slow. The COVID-19 Pandemic continues to negatively impact the overall global economy and daily infection rates were steadily increasing in many areas.

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Overcast conditions and seasonably cool temperatures prevailed during the week. Highs were in the 40s and 50s. Overnight lows were in the 30s and 40s. Intermittent rain showers brought up to 1 inch of precipitation to isolated areas. According to the U.S. Drought Monitor, rainfall remained below average, resulting in moderate drought in western Tennessee. Other areas that missed the precipitation were abnormally dry.

No field activities were reported. Several gins were down to gin days as the season rapidly concluded. Producers were carefully monitoring fluctuating commodity prices as they continued planning for spring planting. The Southern Cotton Ginners Association announced that the annual Mid-South Farm and Gin Show will utilize a virtual format for all events, due to restrictions imposed by local officials because of the on-going COVID-19 Pandemic.

South Delta

Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were steady. Trading of CCC-loan equities was slow. The COVID-19 Pandemic continues to negatively impact economic activity around the world and daily infection rates were steadily increasing in many areas.

Cloudy to partly cloudy conditions characterized the weather pattern during the week. Warm daytime highs climbed into the 70s before dropping back into the 50s. Less than 1 inch of rain was reported in most areas. No field activities were reported. According to the U.S. Drought Monitor, areas of abnormal dryness deteriorated to moderate drought throughout central Louisiana and northwestern Mississippi.

Producers were carefully monitoring fluctuating commodity prices as they continued planning crop selections for spring planting. The Southern Cotton Ginners Association announced that the annual Mid-South Farm and Gin Show will utilize a virtual format for all events, due to restrictions imposed by local officials because of the on-going COVID-19 Pandemic.

Trading

North Delta

  • A light volume of color 41 and better, leaf 4 and better, mike 35-49, strength 28-32, and uniformity 79-84 traded for around 150 points off ICE March futures, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of CCC-loan equities traded for 22.00 cents per pound.
  • Producers booked a light volume of 2021-crop cotton for CCC-loan equities of 19.00 to 20.00 cents.

South Delta

  • Producers booked a light volume of 2021-crop cotton for CCC-loan equities of 19.00 to 20.00 cents per pound.

Southwestern Markets Regional Summary

East Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was good. Average local spot prices were steady. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was slow. Foreign inquiries were moderate. Interest was best from Pakistan, Taiwan, and Turkey. The COVID-19 Pandemic continued to influence market uncertainty and impact global cotton demand. Medical communities struggled treating positive cases. Vaccination clinics were held.

Fields were irrigated prior to planting corn and sorghum in the Rio Grande Valley. Rows were built in dryland fields. Cotton is commonly planted after the grain crops. The final plant date for insurance purposes is March 31. Daytime temperature highs in Weslaco were in the mid-70s to mid-80s and overnight lows were in the 60s and 70s. Industry members expect less cotton acres planted and more corn and grain sorghum acres because of grain prices and dry conditions.

Fertilizer and herbicide were applied in the Upper Coast after fields firmed following recent rainfall. Parts of the Blackland Prairies received thunderstorms that left fields soggy. Virtual field days and trainings were hosted by the Texas Agrilife Extension Service to support producers planning the next cropping season.

In Kansas, some areas received snow and ice. Gins continued pressing seed cotton from the module supply on the gin yards. Transporting modules out of the fields was temporarily halted until soils dry and firm. In Oklahoma, topsoil and subsoil conditions were rated mostly adequate to short, according to the National Agricultural Statistics Service’s Crop Progress report issued on January 25. Some locations received a beneficial light rainfall. A few more gins completed the season.

West Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was good. Average local spot prices were steady. Producer interest in forward contracting was light. Trading of CCC-loan equities was slow. Foreign inquiries were moderate. Interest was best from Pakistan, Taiwan, and Turkey. The COVID-19 Pandemic continued to impact commodity markets and global cotton demand. Infection rates continued to pressure local medical institutions and resources. Vaccination distributions were underway for second doses.

Winter rainfall was received with daytime temperature highs in the upper 30s to low 60s and overnight lows in the low 30s to mid-40s. Some areas south of Lubbock received close to an inch of beneficial moisture. Snow flurries were observed mid-week north of Lubbock. Freezing fog and 0 to 10 degree wind chill factors were reported.

Fieldwork was minimal, but ginning continued at the locations that had modules on the yards. Most gin companies were done for the 2020-season and prepared for the 2021-season. The Abilene and Lubbock Classing Offices continued receiving sample receipts for grading services.

Trading

East Texas

  • In Texas, a light volume of color 52, leaf 3-5, staple 31 and 32, mike 40-46, strength averaging 25.1, and uniformity 76-78 sold for around 63.00 cents per pound, FOB warehouse (compression charges not paid).
  • In Kansas, a light volume of color 31, leaf 2-4, staple 34 and 35, mike averaging 29.1, strength averaging 26.5, and uniformity averaging 78.6 sold for around 65.50 cents, FOB car/truck (compression charges not paid).
  •  In Oklahoma, lots containing a moderate volume of color 31, leaf 3 and better, mostly staple 35-37, mike 40-45, strength 28-31, and uniformity 79-81 sold for 80.00 to 81.50 cents, same terms as above.
  • A light volume of CCC-loan equities traded for 19.00 to 26.00 cents.

West Texas

  • An even-running lot containing a moderate volume of color 11 and 21, leaf 1 and 2, staple 34-36, mike 35-49, strength 28-32, and uniformity 77-81 sold for around 79.50 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of color 11 and 21, leaf 2-4, staple 37, mike 26-33, strength averaging 30.7, and uniformity 75-77 sold for around 72.00 cents, same terms as above.
  • A moderate volume containing color 41 and 51, leaf 8, staple 36 and 37, mike averaging 25.2, strength 25-30, uniformity 76-80, and 100 percent extraneous matter sold for around 60.75 cents, same terms as above.
  • A moderate volume of mostly color 41, leaf 8, staple 36 and 37, mike averaging 25.1, strength averaging 24.4, uniformity averaging 76.5, and 100 percent extraneous matter sold for around 53.50 cents, same terms as above.
  • A light volume of CCC-loan equities traded for 10.25 to 20.25 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was slow. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were steady. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were good. Shippers continued to report U.S. port congestion, vessel wait times, container availability, trucking logistics, and labor shortages. The COVID-19 Pandemic continues to pressure worldwide economies and labor.

High temperatures dropped into the low to mid-50s in central Arizona. Beneficial rain and snow were received. Around one-quarter of an inch up to one-third of an inch of moisture was received in cotton-growing areas. Strong winds downed trees and rains flooded some roadways.

Light snowfall was received just north of the Phoenix metro area. Heavy snow was received in northern Arizona, which caused road closures to parts of Interstate 40. Partly cloudy, cold, and dry conditions continued in New Mexico and El Paso, TX. Ginning wrapped up at most DSW locations.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were moderate. Average local spot prices were steady. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Shippers continued to report U.S. port congestion, vessel wait times, container availability, trucking logistics, and labor shortages. The COVID-19 Pandemic continues to pressure worldwide economies and labor.

Welcomed rain and snow were received in the period. Around one-quarter of an inch up to three-quarters of an inch of rain was received in the Valley, with more to come. The northern SJV received over 1 inch. Strong winds caused power outages in some locations. The coldest storm dropped snow to the 2,000-foot level.

Approximately 2 to 6 feet of snow was received in elevations over 8,000 feet. California Interstate 5 over the grapevine and Highway 58 over the Tehachapi Mountain passes were closed intermittently as the storms rolled through. Wind advisories and winter storm warnings were in effect throughout California. Ginning was completed for the season.

American Pima (AP)

Spot cotton trading was slow. Supplies of 2020-crop cotton were heavy. Demand was very good. 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. Shippers offering prices were higher for 2020-crop cotton. Shippers continued to report U.S. port congestion, vessel wait times, container availability, trucking logistics, and labor shortages. The COVID-19 Pandemic slowed the progress of global economies and labor.

Beneficial rain and snow were received in Arizona and California during the period. Cotton-growing areas received around one-quarter of an inch up to three-quarters of an inch of welcomed precipitation, with more to come. Snowfall was received in higher elevations of the Arizona mountains and the Sierra Nevada Mountain range of California. This is a boost to providing water to Far West reservoirs. Ginning continued in California and Texas.

Trading

Desert Southwest

  • A moderate volume mixed lots of Arizona cotton, mostly color 21 and better, leaf 2 and better, and staple 34 and longer sold for 550 to 600 points off ICE March futures, uncompressed, FOB warehouse.
  • Similar lots containing mike 30-34 or mike 50-52 sold for 700 to 725 points off ICE March futures, same terms as above.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A moderate volume of color 2, leaf 2, and staple 48 was sold.



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