Weekly Cotton Market Review – USDA

    Photo: USDA

    Spot quotations were 385 points lower 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 78.13 cents per pound for the week ending Thursday, March 25, 2021.

    The weekly average was down from 81.98 cents last week, but up from 47.81 reported the corresponding period a year ago. Daily average quotations ranged from a high of 80.07 cents Friday, March 19 to a low of 73.83 cents Thursday, March 25.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended March 25 totaled 3,641 bales. This compares to 10,674 reported last week and 298 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 1,304,395 bales compared to 1,374,368 bales the corresponding week a year ago. The ICE May settlement price ended the week at 78.44 cents, compared to 85.45 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #23 FOR UPLAND COTTON March 25, 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 April 1, 2021, allowing importation of 8,408,469 kilograms (38,619 bales of 480-lbs) of upland cotton.

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    Quota number 23 will be established as of April 1, 2021 and will apply to upland cotton purchased not later than June 29, 2021 and entered into the U.S. not later than September 27, 2021. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period November 2020 through January 2021, 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 inactive. Supplies and producer offerings were light. Demand was moderate. 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 mostly cloudy conditions were observed across the lower Southeast during the period. Daytime high temperatures in the low 60s warmed into the upper 70s as the week progressed. Scattered showers brought moisture to areas throughout Alabama, the Florida Panhandle, and south Georgia. Severe thunderstorms moved across central and north Alabama late in the period bringing damaging winds, large hail, and heavy rainfall.

    Weekly accumulated rainfall totals measured from 2 to 4 inches in south Alabama and along the coast of Georgia. Fieldwork was limited during the week due to intermittent wet weather. Field activities advanced as dry conditions allowed. Ginning neared completion.

    Mostly cloudy conditions dominated the weather pattern during the period across the upper Southeast. Daytime high temperatures in the mid-50s warmed into the mid-70s later in the week. Areas of patchy early morning fog was observed in some areas. Scattered shower activity brought light to moderate precipitation to portions of the eastern Carolinas throughout the week.

    Weekly accumulated precipitation totals measured from trace amounts to around one-half of an inch. Heavier accumulations of around 1 inch were observed along areas of coastal South Carolina and Virginia. Fieldwork advanced as dry conditions allowed. Ginning neared completion.

    Textile Mill

    Buyers for domestic mills inquired for a light volume of 2021-crop cotton, color 41, leaf 3, and staple 36 for fourth quarter delivery. No additional inquiries were reported. Operating schedules were incrementally increased at some locations as finished product orders improved and available labor existed. 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

    • No trading activity was reported.

    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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    Unsettled climatic conditions prevailed as clear and warm weather early in the week gave way to severe weather late week. A mass of warm, moist air brought severe weather in the form of heavy thunderstorms and high winds. Up to 2 inches of rain was reported in some places. Tornado and flash flood warnings were issued in parts of Tennessee on Thursday, March 25, but no damage was reported.

    Daytime highs were mostly in the high 60s to mid-70s. Overnight temperatures were in the 40s and 50s. According to the U.S. Drought Monitor, the region is free of any soil moisture deficits. More precipitation would be helpful to fully recharge irrigation pond levels in some areas that received lesser amounts of rainfall. Many producers were busy preparing equipment for fieldwork and spring sowing. Producers and other members of the cotton industry participated in 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.

    Cloudy to partly cloudy weather prevailed during the period. A mass of warm, moist air brought heavy thunderstorms and high winds late week. Up to 2 inches of rain was reported in some places. Tornado and flash flood warnings were issued in parts of Mississippi on Thursday, March 25, but no damage was reported. Daytime highs were in the 70s throughout the week. Overnight temperatures ranged from the 40s to 60s.

    Ground preparation, including applications of fertilizers and other soil amendments, was well underway in most areas. Producers were busy planting corn. According to the U.S. Drought Monitor, a pocket of moderate drought persists in the cotton-producing area of northeastern Louisiana. Producers and other members of the cotton industry participated in 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 light. Supplies and producer offerings were light. Demand was very light. Average local spot prices were lower. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was inactive. Foreign inquiries were light. Interest was best from China, Pakistan, and Taiwan. Logistics were impacted by the COVID-19 Pandemic and West Coast port congestion.

    Medical communities continued administering vaccinations and offered all three COVID-19 vaccines approved by the Federal Drug Administration. Government stimulus programs encouraged economic recovery.

    Seedlings emerged and began to establish in the Rio Grande Valley (RGV) with daytime temperatures in the mid-70s to low 90s. Windy, sunny conditions prevailed. Stands advanced up to the 2 true leaf stage, according to local sources. Early stands were scouted for insect pests. Planting in Nueces County was nearly completed. Emergence is good, but soil moisture is marginal. Urgent rainfall is needed to keep crops progressing.

    Fields were prepped and ready for cotton planting in the Upper Coast. The northern portion of the Blackland Prairies received more than one and one-half inches of rainfall. Fields were soggy and fieldwork was sporadic. Producers were focused on planting grain crops and cotton field preparation.

    In Kansas, thunderstorms brought beneficial moisture and slowed fieldwork. Moderate rain was received for multiple days with daytime temperature highs in the low 50s to upper 60s. Overnight lows were in the 30s to 40s. Producers made decisions on which seed varieties best fit their needs and ordered seed. Another gin finished the season and will begin maintenance procedures.

    Ginning continued in Oklahoma. Sunny and partly cloudy conditions prevailed as thunderstorms brought valuable precipitation ahead of planting. Fieldwork was halted because the ground was too wet to support equipment. Planting is expected to begin in late April in Harmon County. Oklahoma State University Extension hosted a production meeting and prepared for upcoming dicamba educational programs.

    West Texas

    Spot cotton trading was moderate. Supplies and producer offerings were light. Demand was light. Average local spot prices were lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. Interest was best from China, Pakistan, and Taiwan.

    Cotton logistics continued to be negatively impacted by the COVID-19 Pandemic. Positive cases and hospitalizations have declined. Vaccination clinics expanded and are now offered to individuals in phases 1A, 1B, 1C, and teachers. Anyone over the age of 50 is now able to be vaccinated in West Texas.

    Weather conditions were mixed with daytime highs in the mid-50s to low 80s and overnight temperature lows in the low 20s to mid-50s. Intermittent rainfall brought up to 3 inches of beneficial precipitation to the High Plains and in the Rolling Plains. Some hail was received, but no damage reported. Wind gusts up to 55 miles per hour caused blowing dust and further depleted soil moisture levels. Fire dangers were elevated. Light snow was received in the Texas Panhandle late in the period.

    Row crop prices were encouraging, and cotton crop insurance was set at 83.00 cents with a 9.50 cent seed endorsement. Fertilizer prices were on the rise and factoring into planting decisions. Meetings were attended in person and virtually.

    Trading

    East Texas

    • In Kansas, a light volume of color 31 and 41, leaf 3-5, staple 36 and longer, mike 26-42, strength 28-33, and uniformity 78-81 sold for around 82.50 cents per pound, FOB car/truck (compression charges not paid).
    • A light volume of color 85 and better, leaf 3-8, staple 34 and longer, mike 24-32, strength averaging 29.8, uniformity averaging 79.8, and 75 percent extraneous matter sold for around 58.75 cents, same terms as above.
    • In Oklahoma, a light volume mixed lot containing color 32 and better, leaf 3 and better, staple 35 and longer, mike 34-46, strength averaging 30.4, and uniformity 79-82 sold for around 84.00 cents, same terms as above.
    • A light volume of CCC-loan equities traded for around 21.00 cents.

    West Texas

    • A light volume even-running lot containing color 21 and 31, leaf 2 and 3, staple 38 and 39, mike 36-42, strength averaging 33.0, and uniformity averaging 82.4 sold for around 85.00 cents per pound, FOB car/truck (compression charges not paid).
    • A light volume containing mostly color 44 and better, leaf 4-6, staple 34-36, mike 28-35, strength 29-31, uniformity 79-82, and 100 percent extraneous matter sold for around 63.75 cents, same terms as above.
    • A mixed lot containing a light volume of color 44 and 85, leaf 4-7, staple 35 and longer, mike 30-35, strength 26-30, uniformity averaging 79.7, and 50 percent extraneous matter sold for around 57.00 cents, same terms as above.
    • A light volume of CCC-loan equities traded for around 21.00 cents.

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Vaccinations were progressing steadily in all areas. Various government stimulus programs boosted states’ economic recovery efforts.

    Planting in Yuma, AZ neared completion and stands made good progress. Planting was 25 percent completed compared to 12 percent last year, according to the National Agricultural Statistics Service’s Crop Progress and Condition report released on March 22. Topsoil moisture condition was 71 percent adequate, and subsoil moisture was 83 percent adequate.

    A cold front moved through New Mexico and Texas, which brought windy conditions, but no significant precipitation. Dust storms prevented field activity. Planted acres were expected to decrease in the El Paso lower Valley, due to limited irrigation water, but remain about the same as last year in the north Valley.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Vaccinations were progressing steadily in all areas. Various government stimulus programs boosted states’ economic recovery efforts.

    Daytime high temperatures were in the low 60s to upper 70s, with overnight lows in the high 30s to low 50s. Beneficial rainfall was received early in the reporting period. Snow was received in the mountains. Producers were ready to start planting, but some will wait until after the Easter holiday. On March 23, the California Department of Water Resources announced an adjustment to the initial water allotment from 10 percent to 5 percent of requested amounts.

    The U.S. Bureau of Reclamation also revised the initial allocation for South-of-Delta agricultural and water service contractors to unavailable for delivery until further notice. These announcements were revised based on current snowpack and hydrology conditions and are subject to change.

    American Pima (AP)

    Spot cotton trading was inactive. Supplies and demand were moderate. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light to moderate. According to the Foreign Agricultural Service, US Export Sales report 734,900 bales of AP cotton were committed for export for the week ending March 18. This compares to 539,500 bales the previous year.

    Sales are slowing down, but there is still four months left in the marketing year. Vaccinations were progressing steadily in all areas. Various government stimulus programs boosted states’ economic recovery efforts.

    In the San Joaquin Valley, around three-quarters of an inch of rainfall early in the period prompted initial planting. Daytime high temperatures were expected to be in the 80s next week, and if sustained would spur more fields to be planted. The Visalia Classing Office continued grading services. Planting neared completion in Yuma, AZ, and seedlings made good progress.

    Producers in western and central Arizona, New Mexico, and El Paso, TX were busy pre-plant irrigating fields and are ready to plant as soon as temperatures become optimal in late April. Sources reported that with AP prices steadily higher, producers plan to plant AP in the lower Valley of El Paso. Sowing seed was expected to begin in early April.

    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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