Weekly Cotton Market Review – USDA

    Spot quotations were 267 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 75.46 cents per pound for the week ending Thursday, April 1, 2021.

    The weekly average was down from 78.13 cents last week, but up from 45.13 reported the corresponding period a year ago. Daily average quotations ranged from a high of 76.27 cents Wednesday, March 31 to a low of 73.34 cents Thursday, April 1.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 1 totaled 11,138 bales. This compares to 3,641 reported last week and 1,779 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 1,315,533 bales compared to 1,376,147 bales the corresponding week a year ago. The ICE May settlement price ended the week at 77.95 cents, compared to 78.44 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #24 FOR UPLAND COTTON April 1, 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 8, 2021, allowing importation of 8,408,469 kilograms (38,619 bales of 480-lbs) of upland cotton.

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    Quota number 24 will be established as of April 8, 2021 and will apply to upland cotton purchased not later than July 6, 2021 and entered into the U.S. not later than October 4, 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 light. 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. Vaccination doses were being distributed at a steady pace.

    Mostly cloudy to overcast conditions prevailed during the period. Daytime high temperatures in the 70s to mid-80s cooled into the 60s late week. Thunderstorms brought moderate precipitation to areas across Alabama, the Florida Panhandle, and Georgia throughout the period. Weekly accumulated rainfall totals measured from around 1 to 3 inches.

    The wet weather improved soil moisture conditions in areas where abnormally dry conditions persisted. Clear and windy conditions developed late in the week as a cold front moved across the region. Fieldwork was mostly at a standstill as soils remained too soft to support equipment. Producers prepared equipment for spring planting.

    Similar weather was observed across the Carolinas and Virginia during the period. Mostly cloudy to overcast conditions were observed and widespread thunderstorms brought moderate precipitation to areas throughout the upper Southeast during the week. Weekly accumulated rainfall totals measured from around one-half of an inch to two inches of moisture.

    Patchy early morning fog was observed in some areas. Daytime high temperatures were mostly in the 70s and 80s. Sunny weather late in the week and gusty wind conditions helped soft soils to firm. Fieldwork was at a standstill due to wet weather. Producers prepared equipment for spring planting.

    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 sales or 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 light. Agents throughout the Far East inquired for any discounted styles of cotton for April shipment. Some domestic cotton exporters were unable to offer prompt shipment due to load out dates at most warehouses being six to eight weeks.

    Trading

    • No trading activity was reported.

    South Central Markets Regional Summary

    North Delta

    Spot cotton trading was slow. 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 overcast skies and warm temperatures produced 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 Arkansas and Tennessee on Saturday, March 27. Several confirmed tornadoes were sighted in Mississippi County, Arkansas, but minimal damage was reported. Daytime highs were mostly in the 60s. Overnight temperatures were in the 30s to 50s.

    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. The National Agricultural Statistics Service’s Prospective Plantings report indicated that Upland cotton is estimated at 11.89 million acres, up slightly from 2020. In the North Delta, Arkansas is expected to plant 490,000 acres, a decrease of 7 percent, Missouri 390,000, up 32 percent, and Tennessee 290,000 acres, up 4 percent compared with last season.

    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 Saturday, March 27, but no damage was reported. Daytime highs were in the 70s throughout the week. Overnight temperatures were in the 30s 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.

    The National Agricultural Statistics Service’s Prospective Plantings report indicated that Upland cotton is estimated at 11.89 million acres, up slightly from 2020. In the South Delta, Louisiana is expected to plant 120,000 acres, a decrease of 29 percent, and Mississippi 500,000 acres, which is a 6 percent decrease from last season.

    Trading

    North Delta

    • A light volume even-running lot of color 31, leaf 3 and better, staple 37 and 38, mike 40-49, strength averaging 30.6, and uniformity averaging 81.2 traded for around 85.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).

    South Delta

    • No trading activity was reported.

    Southwestern Markets Regional Summary

    East 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 Vietnam. Logistics were impacted by the COVID-19 Pandemic and West Coast port congestion. Medical communities administered vaccinations. Government stimulus programs encouraged economic recovery.

    In the Rio Grande Valley, the final planting date was March 31 for Cameron, Hidalgo, Jim Hogg, Starr, Willacy, and Zapata Counties, according to the Risk Management Agency. Seedlings had emerged and were established. Rain would benefit the crop. Planting around Corpus Christi was about 75 percent completed, according to local sources, and well ahead of the April 15 final planting date. Seedlings had emerged. Some rain showers were received.

    Planting will begin the weekend of April 2 in the Blackland Prairies (BP). The final planting date is May 31 for most of the counties in the BP. In Kansas, ginning was completed. Planters were prepared and calibrated. Fields were soggy and fieldwork was stalled. In Oklahoma, gins continued submitting samples for classification services.

    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 Vietnam. Cotton logistics continued to be negatively impacted by the COVID-19 Pandemic and West Coast port congestion.

    Local pharmaceutical companies expanded vaccination clinics into rural communities as the vaccine was offered to individuals over the age of 18. The vaccination clinic held at the Civic Center in Lubbock ended on April 1.

    Weather conditions were mixed with daytime highs in the mid-40s to low 80s and overnight temperature lows in the low 20s to mid-50s. Windy conditions persisted with a couple of cold fronts that moved across the region. Planters and sprayers were maintained and prepared ahead of planting. Fields were chiseled and irrigation was applied. Seed was booked. The last samples were submitted for grading services. Ginning was completed.

    Trading

    East Texas

    • In Texas, a moderate volume of color 11 and 21, leaf 1 and 2, staple 37 and longer, mike averaging 38.7, strength 28-34, and uniformity 78-82 sold for around 83.50 cents per pound, FOB car/truck (compression charges not paid).
    • In Kansas, a heavy volume of color 31 and better, leaf 4 and better, staple 33 and 34, mike 30-46, strength 26-31, and uniformity 76-81 sold for around 75.25 cents, same terms as above.
    • A light volume of color 44 and better, leaf 3-5, staple 34-37, mike 30-36, strength averaging 30.4, uniformity averaging 80.1, and 100 percent extraneous matter sold for around 70.00 cents, same terms as above.
    • A light volume of color 41 and 51, leaf 8, staple 36 and 37, mike 24-31, strength 26-29, uniformity 76-80, and 100 percent extraneous matter sold for around 58.00 cents, same terms as above.
    • A light volume of CCC-loan equities traded for 21.00 cents.

    West Texas

    • An even-running lot containing a heavy volume of color 31 and better, leaf 4 and better, staple 37 and longer, mike 33-48, strength 26-36, and uniformity 78-83 sold for around 82.75 cents per pound, FOB car/truck (compression charges not paid).
    • A light volume even-running lot of color 31 and better, leaf 1 and 2, staple 34 and 35, mike 35-46, strength 25-30, and uniformity 76-80 sold for around 77.75 cents, same terms as above.
    • A light volume of color 34 and 44, leaf 4-6, staple 35 and 36, mike 30-36, strength averaging 33.2, uniformity averaging 81.4, and 75 percent extraneous matter sold for around 60.50 cents, same terms as above.
    • A mixed lot containing a light volume of color 32-44, leaf 4-6, staple 34 and longer, mike 25-30, strength 25-32, uniformity 76-80, and 50 percent extraneous matter sold for around 53.50 cents, same terms as above.
    • A light volume of CCC-loan equities traded for 22.75 cents.

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was inactive. Supplies and demand were light. Average local prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. Interest was best from China, Pakistan, and Turkey. Different variants of the COVID-19 virus worldwide remain a concern as vaccinations progressed steadily in the U.S. Various government stimulus programs boosted states’ economic recovery efforts.

    Planting in Yuma, AZ neared completion and stands made good progress. According to the National Agricultural Statistics Service’s (NASS) Prospective Plantings report released on March 31, Arizona Upland cotton acreage is anticipated to be around 115,000 acres, down 10,000 from the previous season. Local experts were in general agreement with the figure, with lack of irrigation water cited as one of the contributing factors.

    Dry conditions persisted in New Mexico and El Paso, TX. A few producers were pre-irrigating with well water, if available. Water allocations from irrigation districts are not available until June. Local experts were in general agreement of the NASS Prospective Plantings acreage for New Mexico and El Paso, TX.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies and demand were light. Average local prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. Different variants of the COVID-19 virus worldwide remain a concern as vaccinations progressed steadily in the U.S. Various government stimulus programs boosted states’ economic recovery efforts.

    Unusually, warm temperatures in the high 70s to low 80s advanced planting activities. According to the National Agricultural Statistics Service’s Prospective Plantings report released on March 31, SJV growers intend to plant 25,000 acres, down 27 percent from the previous year. The decline is attributed to competitive row crops like tomatoes, limited irrigation water supplies, and saving water for tree orchards.

    American Pima (AP)

    Spot cotton trading was inactive. Supplies and demand were moderate. Market indicators continued bullish and some producers and merchants held onto 2020-crop supplies. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light to moderate. Offerings continued, but prices were firm to higher.

    Shipping logistics were difficult for shippers, mostly managing split shipments and rolled bookings. Different variants of the COVID-19 virus worldwide remain a concern as vaccinations progressed steadily in the U.S. Various government stimulus programs boosted states’ economic recovery efforts.

    Planting activities expanded in the San Joaquin Valley as temperatures were in the mid-80s. According to the National Agricultural Statistics Service’s Prospective Plantings report released on March 31, AP planted acreage is expected to be 142,000 acres, down 30 percent from the previous year. Drought conditions, competitive row crops, and maintaining permanent crops influenced planting decisions.

    Trading

    Desert Southwest

    • A light volume of New Mexico cotton color 21 and better, leaf 2 and better, staple 37 and 38 sold for around 83.50 cents per pound, FOB car/truck (compression charges not paid).

    San Joaquin Valley

    • No trading activity was reported.

    American Pima

    • No trading activity was reported.



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