Weekly Cotton Market Review – USDA

    Mature cotton bolls in early morning light. ©Debra L Ferguson

    Spot quotations were down 240 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 84.50 cents per pound for the week ending Thursday, March 4, 2021.

    The weekly average was down from 86.90 cents last week, but up from 57.53 reported the corresponding period a year ago. Daily average quotations ranged from a high of 86.68 cents Monday, March 1, to a low of 82.25 cents Thursday, March 4.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended March 4 totaled 11,605 bales. This compares to 16,250 reported last week and 13,164 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 1,259,300 bales compared to 1,338,188 bales the corresponding week a year ago. The ICE May settlement price ended the week at 87.14 cents, compared to 89.69 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #20 FOR UPLAND COTTON March 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 March 11, 2021, allowing importation of 8,648,011 kilograms (39,720 bales of 480-lbs) of upland cotton.

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    Quota number 20 will be established as of March 11, 2021 and will apply to upland cotton purchased not later than June 8, 2021 and entered into the U.S. not later than September 6, 2021. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period October 2020 through December 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 light. Demand was good. Average local spot prices were lower. Trading of CCC-loan equities was inactive. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains. Clinics were expanding and vaccination doses were being distributed at a steady pace.

    A mix of sunny to cloudy conditions prevailed during the period with widespread shower activity observed across the region. Unseasonably warm daytime high temperatures in the upper 70s to low 80s over the weekend briefly dipped into the upper 40s to low 50s entering the week. Moderate precipitation was received in north Alabama and throughout the coastal plain of south Alabama and south Georgia.

    Weekly accumulated precipitation totals measured from 2 to 3 inches. Elsewhere throughout the lower Southeast, precipitation totals measured around 1 to 2 inches. The wet weather helped alleviate abnormally dry conditions in north Alabama, according to the U.S. Drought Monitor. Fields remained soggy due to wet conditions and fieldwork remained at a standstill. A few gins remained on gin days as they waited on the last modules to arrive on gin yards.

    Partly cloudy to overcast conditions were observed across the upper Southeast during the period. Daytime high temperatures varied from the low 80s to low 50s as a cold front moved across the region later in the week. Widespread shower activity brought moisture to areas throughout the Carolinas and Virginia. Weekly accumulated precipitation totals measured from one-half of an inch to one and one-half inches of moisture. Soils remained soft and fieldwork remained at a standstill. Ginning was completed for the season.

    Textile Mill

    Mill buyers inquired for a heavy volume of 2021-crop cotton, color 41-51, leaf 5 and better, and staple 32 and longer for fourth quarter 2021 through fourth quarter 2022 delivery. No sales were reported. Finished product demand had improved at some locations and operating schedules continued to incrementally increase at some mills. Personal protective equipment continued to be produced for frontline workers and consumers.

    Demand through export channels was moderate. Agents throughout the Far East inquired for any discounted styles of cotton.

    Trading

    • A light volume mixed lot containing color 41-33, leaf 3-5, staple 37 and 38, mike 32-42, strength 27-29, uniformity 81-83, and 25 percent prep sold for around 82.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
    • A heavy volume of color 41-52, leaf 3-5, staple 36-38, mike 37-49, strength 28-32, uniformity 80-82, and containing 75 percent seed coat fragments sold for around 85.25 cents, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

    South Central Markets Regional Summary

    North Delta

    Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy, but daily infection rates have been declining in most places. Vaccinations were progressing steadily in all areas.

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    Severe weather raced through the region early in the period as a mass of warm, moist air brought severe thunderstorms and torrential rainfall. Tornado watches were issued by the National Weather Service for most of the region, but no damage was reported. Flash flooding was reported in many areas due to ground saturation from previous heavy snowfall. Daytime highs briefly soared into the 70s before a cold front returned temperatures to the seasonably cool 50s and 60s. Overnight temperatures were in the 30s and 40s, near the historical average.

    According to the U.S. Drought Monitor, the heavy precipitation received in the past week eliminated areas of moderate drought throughout the region. More precipitation would be helpful to fully recharge subsoil moisture and irrigation pond levels in some areas that received lesser amounts of rainfall. Many producers were still considering planting options as they prepared equipment for spring sowing.

    Producers and other members of the cotton industry participated in the virtual Mid-South Farm and Gin Show, as well as other virtual industry events and educational seminars.

    South Delta

    Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy, but daily infection rates have been declining in many areas. Vaccinations were moving forward at a steady pace in all areas.

    Severe weather moved through the region early in the period as a warm, moist air mass brought severe thunderstorms and torrential rainfall. Tornado watches were issued by the National Weather Service for parts of the region, but no damage was reported. High temperatures were in the 60s and 70s. Overnight lows were in the 40s to 60s. Producers were encouraged by the bullish nature of the ICE December futures prices as they continued planning crop selections and acreage.

    Most producers were busy preparing equipment for the upcoming planting season. No fieldwork was reported due to flooding and saturated soil conditions. According to the U.S. Drought Monitor, the precipitation received in the past week eliminated areas of moderate drought in Louisiana and Mississippi, but more rain is needed to fully recharge the soil moisture profile for optimal crop production.

    Producers and other members of the cotton industry participated in the virtual Mid-South Farm and Gin Show, as well as other virtual industry events and educational seminars.

    Trading

    North Delta

    • No trading activity was reported.

    South Delta

    • No trading activity was reported.

    Southwestern Markets Regional Summary

    East Texas

    Spot cotton trading was moderate. Supplies and producer offerings were moderate. Demand was moderate. Average local spot prices were lower. Producer interest in forward contracting was heavy. Trading of CCC-loan equities was slow. Foreign inquiries were light. Interest was best from Taiwan, Turkey, and Vietnam. The Texas governor lifted the COVID-19 Pandemic mask mandate and opened all businesses 100 percent, effective March 10. Medical communities continued administering vaccinations by appointment and were encouraged with the release of a third product.

    Corn and sorghum planting were underway in the Rio Grande Valley and in the Upper Coast. Widespread cotton planting will begin soon after these crops are sown. Producers pre-watered fields. Fertilizer and herbicide were applied throughout south Texas. In the Blackland Prairies, some areas received up to 2 inches of recent rainfall that slowed fieldwork. Cotton planting seed was booked.

    In Kansas, harvesting neared completion. Ginning restarted and proceeded without interruption. Grades were disappointing and attributed to the early cold front that occurred in September. Planted acres were expected to be significantly less than last season with some acres rotating to competing crops. In Oklahoma, ginning continued and producers were encouraged with good grades. Planted acreage was expected to be similar to last season.

    West Texas

    Spot cotton trading was moderate. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was slow. Foreign inquiries were light. Interest was best from Taiwan, Turkey, and Vietnam. COVID-19 cases and hospitalizations have declined across the United States. The Texas governor announced the mask mandates were rescinded, and that businesses could open at full capacity on March 10.

    A weak cold front early in the period brought intermittent, light rain and snowfall. Daytime highs were in the low 30s to upper 70s with overnight temperatures in the teens to low 40s. All precipitation is beneficial, but the amounts received were light. More rainfall is needed to help ease droughty conditions. Sunny and windy conditions returned mid-week. Fieldwork was minimal. Producers booked planting seed. Ginning continued.

    Trading

    East Texas

    • In Kansas, a light volume of color 31 and 41, leaf 3 and 4, staple 36 and 37, mike averaging 33.9, strength averaging 30.6, uniformity averaging 81.0, and 25 percent extraneous matter sold for around 84.00 cents per pound, FOB car/truck (compression charges not paid).
    • A mixed lot containing a light volume of color 31 and 41, leaf 2-5, staple 35 and longer, mike 31-43, strength 26-31, uniformity 78-81, and 25 percent extraneous matter sold for around 81.50 cents, same terms as above.
    • In Oklahoma, a light volume containing color 21 and 31, leaf 3 and better, staple 37 and longer, mike 31-42, strength 30-32, and uniformity 79-82 sold for around 90.25 cents, same terms as above.
    • A light volume of CCC-loan equities traded for 15.25 to 16.25 cents.

    West Texas

    • A heavy volume of color 31 and better, leaf 3 and better, staple 36 and longer, mike 35-52, strength 26-35, and uniformity 78-82 sold for around 89.75 cents per pound, FOB car/truck (compression charges not paid).
    • A light volume containing mostly color 21, leaf 2 and 3, staple 35-37, mike 29-43, strength 28-31, and uniformity 78-81 sold for around 83.00 cents, same terms as above.
    • A light volume containing mostly color 34 and 44, leaf 4-7, staple 35-37, mike averaging 28.8, strength 29-32, uniformity 77-79, and 100 percent extraneous matter sold for around 65.50 cents, same terms as above.
    • A light volume of CCC-loan equities traded for around 31.50 cents.

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were lower. Cooperatives and merchants opened pool sign-ups. No domestic mill activity was reported. Foreign mill inquiries were light. Slight improvements were noted in consumer spending, world economies, labor, and demand for agricultural products due to COVID-19 vaccines becoming more widely available, various government stimulus programs, and local and regional recovery efforts.

    Daytime high temperatures were in the low 70s in Arizona. Fieldwork was active and producers readied equipment for planting. Scattered showers and cool conditions slowed planting in Yuma. Some cotton was up. Seed deliveries continued. Arizona producers intend to plant the same amount of cotton acreage as last year. Mostly sunny conditions kept daytime high temperatures in the mid-60s and 70s for New Mexico, El Paso, TX. Strong, gusty winds were reported late in the period. Field activities consisted of pre-plant irrigating and herbicide sprays.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. Producers inquired for 2021-crop forward contracts. Cooperatives and merchants opened pool sign-ups. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Some improvements were noted in consumer spending, world economies, labor, and demand for agricultural products due to COVID-19 vaccines becoming more widely available, various government stimulus programs, and local and regional recovery efforts.

    Temperatures were mostly in the 70s. Producers prepared fields and equipment for planting. The current California State Water Project (SWP) allocation is 10 percent to be distributed among the 29 long-term SWP contractors. Last year the initial allocation was also 10 percent, with a final allocation of 20 percent set in May 2020. The U.S. Bureau of Reclamation announced on February 23, the initial allocation for South-of-Delta agricultural and water service contractors is 5 percent.

    Water allotments are subject to change if snowpack and reservoir levels improve. The third manual snow survey was conducted on March 2 and confirmed that water content in the Sierra Nevada Mountain snowpack is around 60 percent normal for this date. Producers and industry attended the Sticky Cotton Summit hosted by California Cotton Ginners and Growers Association on March 3.

    American Pima (AP)

    Spot cotton trading was inactive. Supplies of 2020-crop cotton were moderate. Demand was good. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were slow. Interest was best from China and Korea. No new sales were reported. Shipper’s offering prices for 2020-crop cotton were higher. West coast ports congestion remains a concern.

    Some improvements were noted in consumer spending, world economies, labor, and demand for agricultural products due to COVID-19 vaccines becoming more widely available, various government stimulus programs, and local and regional recovery efforts.

    Temperatures were in the 60s and 70s. Planting was active in Yuma, AZ. Fieldwork was active across the region. Field activities consisted of pre-plant irrigating and herbicide sprays. Planting seed was sold and delivered to California producers. Ginning continued in the San Joaquin Valley. The current California State Water Project (SWP) allocation is 10 percent to be distributed among the 29 long-term SWP contractors. Last year the initial allocation was also 10 percent, with a final allocation of 20 percent set in May.

    The U.S. Bureau of Reclamation announced the initial allocation for South-of-Delta agricultural and water service contractors is 5 percent on February 23. Water allotments are subject to change if snowpack and reservoir levels improve. The third manual snow survey was conducted on March 2 and confirmed that water content in the Sierra Nevada Mountain snowpack is around 60 percent normal for this date. Producers and industry attended the Sticky Cotton Summit hosted by California Cotton Ginners and Growers Association on March 3.

    Trading

    Desert Southwest

    • A moderate volume of Arizona 2021-crop cotton for contract base quality color 31, leaf 3, and staple 36 was contracted at even to 50 points on ICE December futures. These contracts were subject to government discounts.

    San Joaquin Valley

    • No trading activity was reported.

    American Pima

    • No trading activity was reported.



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