Weekly Cotton Market Review – USDA

    Clean young cotton field in the Lower Rio Grande Valley. Photo by Danielle Sekula Ortiz.

    Spot quotations were 49 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 74.97 cents per pound for the week ending Thursday, April 8, 2021.

    The weekly average was down from 75.46 cents last week, but up from 47.85 reported the corresponding period a year ago. Daily average quotations ranged from a low of 73.27 cents Monday, April 5 to a high of 76.95 cents Thursday, April 8.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 8 totaled 7,787 bales. This compares to 11,138 reported last week and 8,603 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 1,323,320 bales compared to 1,384,750 bales the corresponding week a year ago. The ICE May settlement price ended the week at 81.41 cents, compared to 77.95 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #25 FOR UPLAND COTTON April 8, 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 15, 2021, allowing importation of 8,408,469 kilograms (38,619 bales of 480-lbs) of upland cotton.

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    Quota number 25 will be established as of April 15, 2021 and will apply to upland cotton purchased not later than July 13, 2021 and entered into the U.S. not later than October 11, 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.

    Sunny to fair conditions were observed across the lower Southeast during the period. Unseasonably warm daytime temperatures were in the upper 70s to low 80s. The warm and dry conditions helped soft soils to firm in areas that had received heavy moisture in recent weeks. Rain showers brought light to moderate precipitation to areas throughout Alabama and along the Gulf Coast late in the week.

    A river flood warning was in effect for Mobile County, Alabama. Fieldwork advanced as producers prepared to put seed in the ground. Planting had begun on a limited basis, but most producers were waiting to get beyond the risk of severe thunderstorms in the forecast, which could deposit 1 to 3 inches of moisture over the weekend.

    Mostly sunny conditions dominated the weather pattern across the Carolinas during the week, with a mix of sun and clouds observed in eastern Virginia. Unseasonably warm daytime temperatures were in the upper 70s to low 90s. The dry and warm conditions helped to firm fields that were waterlogged from recent heavy rainfall. Producers continued fieldwork. Fertilizer was applied and producers prepared fields for spring planting.

    Textile Mill

    Buyers for domestic mills inquired for a moderate volume of color 41, leaf 3 and 4, and staple 35 for June through December 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. Korean mill buyers purchased a moderate volume of 2021-crop cotton, color 31, leaf 3, and staple 35 for October 2021 through June 2022 shipment. Agents for mills in Mexico and Taiwan inquired for a moderate volume of color 41 and 42, leaf 4 and better, and staple 33 and 34 for April/May shipment.

    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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    Clear and warm conditions prevailed for most of the week. Daytime highs were mostly in the 70s and 80s. Overnight temperatures were in the 50s and 60s. A band of thundershowers brought up to 1 inch of rain to the region late week. Many producers were busy preparing equipment for fieldwork and spring sowing. Some fieldwork was underway in areas dry enough to support equipment.

    Producers and other members of the cotton industry participated in virtual industry events and educational seminars. Most local observers agreed with the National Agricultural Statistics Service’s Prospective Plantings report, issued on March 31, which indicated that Upland cotton acreage is expected to increase in Missouri and Tennessee compared to last season.

    South Delta

    Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were higher. 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.

    Sunny to partly cloudy weather prevailed early in the period. A series of strong thunderstorms brought up to 1 inch of rain to some areas. Daytime highs were in the 70s and 80s throughout the week. Overnight temperatures were in the 50s and 60s. Ground preparation, including applications of fertilizers and other soil amendments, was well underway in most areas. Producers were busy planting corn and soybeans.

    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. Some local experts indicated that cotton acreage in Louisiana could drop even lower than the 29 percent reduction estimated by the National Agricultural Statistics Service’s Prospective Plantings report issued March 31.

    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 slow. Supplies and producer offerings were light. Demand was very light. Average local spot prices were weak. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Logistics were impacted by the COVID-19 Pandemic and West Coast port congestion. Medical communities administered vaccinations.

    In the Rio Grande Valley, sunny to partly cloudy conditions were observed and windy conditions persisted throughout the period. Daytime high temperatures varied from the mid-70s to mid-90s. No precipitation was received and severe-to-extreme drought conditions persisted, according to the U.S. Drought Monitor. Timely rainfall would enhance seedling vigor.

    In the Coastal Bend, warm and muggy conditions prevailed. Mostly dry weather was observed and emerging seedlings would benefit from rainfall. In the Blackland Prairies, a mix of sun and clouds was observed with warm daytime temperatures in the upper 70s to low 80s. Planting was getting underway.

    In Kansas, light to moderate rainfall received late in the week delayed fieldwork in some cotton growing areas. In Oklahoma, dry conditions prevailed and field activities continued uninterrupted.

    West Texas

    Spot cotton trading was moderate. Supplies and producer offerings were light. Demand was light. Average local spot prices were weak. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign inquiries were light. 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.

    Weather conditions varied from a mix of sunny to partly cloudy conditions with daytime highs in the upper 60s to low 90s. Overnight temperature lows were in the mid-40s to upper 50s. Dry and windy weather continued to be observed across the region. Droughty conditions delayed seed bed preparation on dryland acreage. Producers pre-watered fields and pre-planting activities continued uninterrupted in the High Plains and Southern Low Plains.

    Trading

    East Texas

    • In Oklahoma, a light volume of color 31-42, leaf 3 and 4, staple 33-35, mike 40-44, strength 28-32 uniformity 79-80, and 50 percent extraneous matter sold for around 71.00 cents per pound, FOB car/truck (compression charges not paid).
    • In Kansas, a moderate volume mixed lot containing mostly color 33 and 43, leaf mostly 5-7, staple 35, mike 28-32, strength 29-30, uniformity 80-81, and 100 percent extraneous matter sold for around 60.00 cents, same terms as above.
    • A light volume mixed lot containing color 41-52, leaf 8, staple 35 and 36, mike 25-28, strength 28-30, uniformity 77-80, and 100 percent extraneous matter sold for around 58.00 cents, same terms as above.

    West Texas

    • Even-running lots containing color 11 and 21, leaf 1 and 2, staple 37 and 38, mike 35-49, strength 29-33, and uniformity 79-81 sold for around 83.50 cents per pound, FOB car/truck (compression charges not paid).
    • Heavy volume mixed lots containing mostly color 11, 21, and 31, leaf 1-3, staple 36 and longer, mike 35-49, strength 29-33, and uniformity 80-82 sold for around 82.75 cents, same terms as above.
    • Heavy volume even-running lots containing color mostly 11 and 21, leaf 1-3, staple 34, mike 37-49, strength 26-29, and uniformity 78-80 sold for around 78.00 cents, same terms as above.
    • A light volume of color mostly 31 and 32, leaf 3 and 4, staple 34-36, mike 33-43, strength 27-30, and uniformity 78-82 sold for 71.75 to 72.50 cents, same terms as above.
    • Moderate volume mixed lots containing color 44 and better, leaf 4-6, staple 32 and longer, mike 26-36, strength 28-32, uniformity 78-81, and 50 percent extraneous matter sold for around 61.75 cents, same terms as above.
    • A light volume of CCC-loan equities traded for around 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. Different variants of the COVID-19 virus worldwide remain a concern as vaccination eligibility expanded across the U.S. Various government stimulus programs boosted states’ economic recovery efforts. Restaurants and other businesses were opening to increased capacity, as well as schools.

    Temperatures were in the 90s. The Yuma crop made good progress. Planting began in central Arizona. Dry conditions persisted throughout the DSW. Late week, high wind warnings and red flag warnings were in effect in New Mexico and El Paso, TX as strong winds kicked up dust. Field activity was limited. The Visalia Classing Office reported the final Arizona season average predominate color 21 and better was at 79 percent, leaf 2 and better at 85 percent, mike averaging 4.57, staple averaging 37.10, and strength averaging 31.56 gpt.

    The final quality results for New Mexico and El Paso, TX season average predominate color 21 and better was at 89 percent, leaf 2 and better at 97 percent, mike averaging 4.32, staple averaging 36.97, and strength averaging 30.15 gpt.

    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. Interest was best for color 21, leaf 2, staple 38 and longer. Different variants of the COVID-19 virus worldwide remain a concern as vaccination eligibility expanded across the U.S. Various government stimulus programs boosted states’ economic recovery efforts. Restaurants and other businesses were opening to increased capacity, as well as schools.

    Daytime high temperatures were in the high 70s to low 80s. Planting continued in the SJV. The Visalia Classing Office reported the final season average for saw-ginned Upland predominate color 21 and better was at 69 percent, leaf 2 and better at 76 percent, mike averaging 4.20, staple averaging 37.25, and strength averaging 32.03 gpt. Quality results for roller-ginned Upland season average was reported as predominate color 31 at 69 percent, leaf 2 at 49 percent, mike averaging 4.34, staple averaging 38.52, and strength averaging 36.28 gpt.

    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 cotton remains a concern, due to West Coast port congestion.

    According to the Foreign Agricultural Service, U.S. Export Sales report nearly 747,000 bales of Pima cotton were committed for export for the week ending April 1. This compares to 541,400 bales the previous year. Only 1,100 bales were committed for the 2021 marketing year. Different variants of the COVID-19 virus worldwide remain a concern as vaccination eligibility expanded across the U.S. Various government stimulus programs boosted states’ economic recovery efforts. Restaurants and other businesses were opening to increased capacity, as well as schools.

    Temperatures were in the mid-70s to high 90s in the Far West. No moisture was recorded in the period. Planting continued in the San Joaquin Valley, but neared completion as producers intended to plant less. Late week, strong winds entered the region prompting high wind warnings and red flag warnings were in New Mexico and El Paso, TX. Fieldwork was limited. The Visalia Classing Office reported the season average predominate AP color 2 at 69 percent, leaf 2 at 54 percent, staple averaging 49.31, mike averaging 4.28, and strength averaging 44.00 gpt.

    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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