Weekly Cotton Market Review – USDA

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    Average spot quotations were up 5 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 77.40 cents per pound for the week ending Thursday, February 4, 2021.

    The weekly average was up from 77.35 cents last week and from 62.97 reported the corresponding period a year ago. Daily average quotations ranged from a low of 76.10 cents Monday, February 1 to a season high of 80.35 cents Thursday, February 4.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended February 4 totaled 42,139 bales. This compares to 33,528 reported last week and 22,305 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 1,180,334 bales compared to 1,238,993 bales the corresponding week a year ago. The ICE March settlement price ended the week at 84.28 cents, compared to 79.93 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #16 FOR UPLAND COTTON February 4, 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 11, 2021, allowing importation of 9,464,255 kilograms (43,469 bales of 480-lbs) of upland cotton.

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    Quota number 16 will be established as of February 11, 2021 and will apply to upland cotton purchased not later than May 11, 2021 and entered into the U.S. not later than August 9, 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 were light. 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.

    A mix of sunny to cloudy conditions were observed across the lower Southeast during the period. Daytime high temperatures varied from the mid-40s to low 60s. Scattered showers brought moisture to areas of central and south Georgia. Weekly accumulated rainfall totals measured from around one quarter to one-half of an inch. The moisture helped replenish subsoil moisture in areas were abnormally dry conditions persisted.

    Fieldwork continued in areas where soils were firm enough to support equipment. Ginning was winding down; some gins had gone to gin days as they waited for modules to accumulate on gin yards.

    Mostly cloudy to overcast conditions prevailed across the upper Southeast during the period. Daytime high temperatures were in the low 40s to low 50s. Widespread showers brought moderate precipitation to areas of the eastern Carolinas and Virginia. Weekly accumulated precipitation totals measured from one-half of an inch to two inches. Lesser accumulations from trace amounts to around one-half of an inch were received in the central Carolinas.

    Fieldwork remained at a standstill due to wet conditions. Some gins remained on gin days as they waited for the last remaining modules to accumulate on gin yards.

    Textile Mill

    Buyers for domestic mills purchased a moderate volume of color 41, leaf 3, and staple 36 for second quarter through fourth quarter delivery. No additional sales were reported. Mill buyers made inquiries for 2021-crop cotton, color 41, leaf 4, and staple 34 and longer for fourth quarter 2021 through first quarter 2022 delivery.

    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. Agents throughout the Far East inquired for any discounted or low grade styles of cotton.

    Trading

    • A light volume of color 41, leaf 2 and 3, staple 37, mike 43-49, strength 27-29, and uniformity 81-83 sold for around 25 points off ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
    • A moderate volume of color 41, leaf 3 and 4, staple 36-38, mike 43-47, strength 28-31, uniformity 81-83, and 50 percent extraneous matter sold for around 75 points off ICE March futures, same terms as above.
    • A heavy volume mixed lot containing color mostly 41 and 42, leaf 3 and 4, staple 36-38, mike 43-49, strength 27-30, uniformity 80-83, and 50 percent seed coat fragments sold for around 125 points off ICE March futures, same terms as above.
    • A moderate volume mixed lot containing color mostly 41 and 42, leaf 3 and 4, staple 37 and 38, mike 35-49, strength 28-31, and uniformity 80-82 sold for around 79.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

    South Central Markets Regional Summary

    North Delta

    Spot cotton trading was moderate. Supplies of available cotton were moderate. Demand was light. Average local spot prices were steady. 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.

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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 20s and 30s. Scattered rain showers brought less than 1 inch of precipitation to most areas. According to the U.S. Drought Monitor, rainfall remained below average despite recent showers, resulting in a slight expansion of moderate drought in northeastern Arkansas and western Tennessee. Other areas that missed the precipitation remained abnormally dry.

    No field activities were reported. A few gins continued to have gin days in the Memphis territory. The Dumas Classing Office completed annual operations for this cotton season. Producers were closely watching commodity prices as they continued planning for the upcoming crop season.

    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 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.

    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 moderate drought expanded throughout central Louisiana and northwestern Mississippi. The Rayville Classing Office completed annual operations for this cotton season.

    Producers were carefully monitoring commodity prices as they continued planning crop selections for planting season. The Louisiana Cotton and Grain Association’s annual meeting on February 23 will be a hybrid meeting, with in-person and virtual attendance options, due to restrictions imposed by local officials because of the on-going COVID-19 Pandemic.

    Trading

    North Delta

    • A moderate volume of color 31 and better, leaf 3 and better, staple 37 and longer, mike 40-49, strength 29-34, and uniformity 79-84 traded for around 86.50 cents per pound, FOB car/truck (Rule 5, compression charges paid.
    • A light volume of color 31 and better, leaf 4 and better, staple 37 and longer, mike 35-49, strength 29-35, and uniformity 79-85 traded for around 100 points off ICE March futures, same terms as above.
    • A moderate volume of color 41 and better, leaf 5 and better, staple 37 and longer, mike 33-50, strength 28-33, and uniformity 79-85 traded for around 225 points off ICE March futures, same terms as above.

    South Delta

    • No trading activity was reported.

    Southwestern Markets Regional Summary

    East Texas

    Spot cotton trading was active. Supplies and producer offerings were moderate. 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 China, Pakistan, and Turkey. The COVID-19 Pandemic continued to influence market uncertainty and impact global cotton demand. Medical communities struggled in treating positive cases. Vaccination clinics were held.

    Sunshine prevailed in south Texas with daytime temperature highs in the upper 60s to low 80s and overnight lows in the upper 40s to mid-60s. Fieldwork was active with fertilizer and herbicide applications in the Upper Coast. Producers in the Rio Grande Valley began planting alternative crops. Irrigation lake water is low and will be saved for the sugar cane crop. Cotton planted acres are expected to be significantly less compared to the previous year, mostly because of extremely dry growing conditions.

    Soggy fields in Kansas brought final harvesting to a standstill from recent beneficial snow and rainfall. Ginning continued even though the gin yards were muddy. According to local reports, a few thousand acres remained to be harvested. A couple of gins finished during the reporting period. Yields and grades were disappointing for producers. Many producers committed to grow sorghum next season in Kansas and in Oklahoma.

    West Texas

    Spot cotton trading was active. Supplies and producer offerings were moderate. 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 light. Interest was best from China, Pakistan, 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 first and second doses.

    Unseasonably warm conditions prevailed with daytime highs in the upper 50s to low 80s and overnight temperatures in the low 20s to mid-50s. On January 30, gusty winds up to 60 miles per hour brought zero visibility conditions with blowing red dirt in Lubbock and surrounding locations. Fields were further dried, and erosion was a concern.

    Producers took advantage of the moisture from recent snow and began building rows. Fieldwork was interrupted again late in the period because a cold front entered the region and brought windy conditions. Final harvesting was underway in the Northern and Southern Low Plains. Ginning continued, but a few more gins finished for the season.

    Trading

    East Texas

    • In Texas, a lot containing a light volume of 2019-crop cotton, color 41 and 42, leaf 3-5, staple 38 and 39, mike 37-50, strength 29-33, uniformity 80-82, and 100 percent extraneous matter sold for around 65.00 cents per pound, FOB warehouse (compression charges not paid).
    • In Kansas, a heavy volume of color 21 and 31, leaf 2-4, staple 34 and 35, mike averaging 39.1, strength 27-32, and uniformity 79-81 sold for around 76.00 cents, FOB car/truck (compression charges not paid).
    • A light volume of color 32 and better, leaf mostly 4, staple 35, mike 34-48, strength 29-32, and uniformity 79-81 sold for around 72.75 cents, same terms as above.
    • In Oklahoma, a moderate volume of color 31, leaf 2-4, staple 35, mike 43-49, strength averaging 34.4, uniformity 79-82, and 25 percent extraneous matter sold for around 76.50 cents, same terms as above.
    • A light volume of CCC-loan equities traded for 19.25 to 23.75 cents.

    West Texas

    • Lots containing a heavy volume of color 31 and better, leaf 5 and better, staple 35 and longer, mike 35-49, strength 29-33, and uniformity 79-82 sold for 80.00 to 80.50 cents per pound, FOB car/truck (compression charges not paid).
    • A moderate volume of color 32 and better, leaf 2 and 3, staple 34 and longer, mike 35-43, strength 29-33, and uniformity 79-82 sold for around 75.75 cents, same terms as above.
    • A heavy volume containing color 31 and better, leaf 1 and 2, staple 33, mike averaging 43.8, strength 25-29, and uniformity 77-81 sold for around 73.25 cents, same terms as above.
    • A 2019-crop mixed lot containing a heavy volume of color 44 and better, leaf 2-4, staple 36 and 37, mike 35-48, strength 29-35, uniformity 77-83, and 50 percent extraneous matter sold for around 70.75 cents, same terms as above.
    • A light volume of CCC-loan equities traded for around 19.25 cents.

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was active. Supplies and producer offerings were moderate, as ICE March futures continued in the 80 cents range. Demand was moderate. Average local spot prices were steady. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. No domestic mill activity was reported. Foreign mill inquiries were good. The COVID-19 Pandemic continues to pressure worldwide economies and labor.

    Shippers continued to report U.S. port congestion, vessel wait times, container availability, trucking logistics, and labor shortages. The situation doesn’t appear to be improving, but the approaching Chinese New Year should help with vessel imports.

    Daytime high temperatures were in the low 70s to low 80s in central Arizona. Partly cloudy, clear, and dry conditions continued in New Mexico and El Paso, TX. Temperatures were above average in the mid-60s to mid-70s. No moisture was received in the period. According to the U.S. Drought Monitor for week ending February 2, cotton-growing counties of Arizona, New Mexico, and El Paso, TX continued in severe-to-exceptional drought status.

    Parts of Yuma County, AZ showed less severe drought conditions. DSW producers considered spring planting options. Ginning continued. The Visalia Classing Office night shift was discontinued on Friday, January 29. The industry participated in the National Cotton Council virtual meeting.

    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. The COVID-19 Pandemic continues to pressure worldwide economies and labor.

    Shippers continued to report U.S. port congestion, vessel wait times, container availability, trucking logistics, and labor shortages. The situation doesn’t appear to be improving, but with the Chinese New Year approaching should help ease vessel imports.

    Above-average temperatures were the norm for most of the week. Rain events from the previous week kept the air clear with mostly sunny conditions. Fieldwork was limited as fields were too wet to support equipment. Fog and a drop in temperatures entered the SJV late in the period. Moderate-to-severe drought conditions existed, according to the U.S. Drought Monitor for week ending February 2. The California Department of Water Resources reported the statewide snowpack at 70 percent of normal for February 3, but 45 percent of the April 1 average.

    The snowpack water equivalent was reported at 12.5 inches. Ginning was completed for the season. Producers considered planting options. The Visalia Classing Office night shift was discontinued on Friday, January 29. The industry participated in the National Cotton Council virtual meeting.

    American Pima (AP)

    Spot cotton trading was active. Supplies and producer offerings 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 was reported. Foreign mill inquiries were heavy. Interest was best from China and Peru. Shippers offering prices were higher for 2020-crop cotton. No forward sales of 2021-crop were reported.

    The COVID-19 Pandemic continues to pressure worldwide economies and labor. Shippers continued to report U.S. port congestion, vessel wait times, container availability, trucking logistics, and labor shortages. The situation doesn’t appear to be improving, but with the Chinese New Year approaching should ease vessel imports.

    According to the U.S. Drought Monitor for week ending February 2, cotton-growing counties of Arizona, California, New Mexico, and El Paso, TX remained in moderate-to-exceptional drought status. Improvements were made to Arizona and California snowpacks last week, but no rain was in the near term. Ginning continued in California and Texas. The Visalia Classing Office night shift was discontinued on Friday, January 29. The industry participated in the National Cotton Council virtual meetings.

    Trading

    Desert Southwest

    • A moderate volume of mostly color 21 and better, leaf 2 and better, staple 37-39, mike averaging 45.0, strength averaging 31.8, and uniformity averaging 81.5 sold for 50-100 points on ICE March futures, uncompressed, FOB warehouse.
    • Similar lots containing mike 30-34 sold for around 75 points off ICE March futures, same terms as above.
    • Similar lots containing staple 35 and 36 sold for around 525 points off ICE March futures, same terms as above.

    San Joaquin Valley

    • No trading activity was reported.

    American Pima

    • A heavy volume of color 2, leaf 2, and staple 46 and longer was sold to domestic mills.
    • A moderate volume of mostly color 1, leaf 1, and staple 48 and longer sold for around 127.00 cents per pound, uncompressed, FOB warehouse.
    • A moderate volume of color 2 and better, leaf 2 and better, and staple 46 and longer sold for 130.00 to 135.00 cents, UD free, FOB warehouse.



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