Weekly Cotton Market Review – USDA

    Photo by MSU Extension Service/Kevin Hudson

    Spot quotations were 328 points higher 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 78.25 cents per pound for the week ending Thursday, April 15, 2021.

    The weekly average was up from 74.97 cents last week and from 47.55 reported the corresponding period a year ago. Daily average quotations ranged from a low of 75.68 cents Monday, April 12 to a high of 80.56 cents Thursday, April 15.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 15 totaled 9,132 bales. This compares to 7,787 reported last week and 22,698 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 1,332,452 bales compared to 1,407,747 bales the corresponding week a year ago. The ICE May settlement price ended the week at 85.02 cents, compared to 81.41 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #26 FOR UPLAND COTTON April 15, 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 22, 2021, allowing importation of 8,126,524 kilograms (37,324 bales of 480-lbs) of upland cotton.

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    Quota number 26 will be established as of April 22, 2021 and will apply to upland cotton purchased not later than July 20, 2021 and entered into the U.S. not later than October 18, 2021. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period December 2020 through February 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 slow. Supplies and producer offerings were light. Demand was light. Average local spot prices were higher. 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.

    A mix of sunny to cloudy conditions were observed across the lower Southeast during the period. Daytime high temperatures were in the 70s to mid-80s. Overnight low temperatures were in the 50s to 60s. Widespread thundershowers brought moisture to areas throughout Alabama, the Florida Panhandle, and portions of south Georgia over the weekend and during the week.

    Weekly accumulated precipitation totals measured from 1 to 3 inches. Fieldwork was delayed in areas where soils were too soft to support equipment. Planting had begun on a limited scale, but most producers were waiting for warmer temperatures to enhance seed germination.

    Sunny to partly cloudy conditions were observed across the upper Southeastern region during the period. Daytime high temperatures were mostly in the low to mid-80s. Overnight low temperatures were in the 50s. Scattered rainfall was received throughout the week in the eastern Carolinas and Virginia.

    Precipitation totals measured from one-half of an inch to around one and one-half inches for the week. The wet weather helped fortify subsoil moisture. Fieldwork advanced as dry conditions allowed. Producers prepared fields and applied fertilizer in preparation for spring planting.

    Textile Mill

    Buyers for domestic mills purchased a light volume of color 41, leaf 3, and staple 36 for July delivery. Mill buyers inquired for a moderate volume of color 41, leaf 3 and 4, and staple 35 for second quarter through fourth quarter delivery. No additional sales were reported. Yarn demand was good. 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.

    Trading

    • Even-running lots containing color 31 and 41, leaf 3 and 4, staple 37 and longer, mike 37-42, strength 27-30, and uniformity 81-83 sold for around 84.00 cents per pound, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
    • Similar lots containing staple 36 sold for around 83.00 cents, same terms as above.
    • Even-running lots containing color 41, leaf 3 and 4, staple 36 and longer, mike 43-49, strength 28-30, and uniformity 80-82 sold for around 82.75 cents, FOB car/truck (Rule 5, compression charges paid).

    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 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 most places. Vaccinations were progressing steadily in all areas.

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    Cloudy to partly cloudy conditions prevailed for most of the week. Daytime highs were mostly in the 70s and 80s, but dropped into the 60s as cool air moved in late week. Overnight temperatures were in the 50s. A series of thundershowers brought up to 1 inch of rain to the region. Saturated soils hindered fieldwork in some areas; fieldwork progressed steadily in areas where soils were firm enough to support equipment.

    Local experts reported that total cotton acreage in their areas were still in question, due to price and weather considerations. Cotton planting was expected to begin in the next week to ten days, weather conditions permitting. 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 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.

    Cloudy skies and rain showers early in the week gave way to sunny weather, but more rain returned late in the period. Bands of heavy thunderstorms brought up to 4 inches of rain to some areas. Fieldwork was delayed in many places. Daytime highs in the mid-80s were 8 to 10 degrees higher than seasonal averages, but overnight lows in the 50s and 60s were 6 to 8 degrees lower than average.

    Cotton specialists reported that overall cotton plantings in their areas were still in question, due to price and weather considerations. Cotton planting was expected to begin in the next few days in Mississippi; planting was just getting underway in Louisiana, according to local experts. 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

    • A light volume of color 41, leaf 3 and 4, staple 36 and longer, mike averaging 44.8, strength averaging 30.6, and uniformity averaging 81.7 traded for around 82.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).

    South Delta

    • A light volume of color 41, leaf 3 and 4, staple 36 and longer, mike averaging 44.8, strength averaging 30.6, and uniformity averaging 81.7 traded for around 82.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).

    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 higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was active. Logistics were impacted by the COVID-19 Pandemic and West Coast port congestion. Medical communities administered vaccinations.

    In the Rio Grande Valley, conditions were partly cloudy. Daytime temperatures ranged from the mid-80s to low 90s. No significant amount of precipitation was received. Severe-to-extreme drought conditions continued. A timely rainfall would enhance seedling vigor. The progress of the crop spans from planting to 5 true leaf stage. Producers were encouraged to monitor for insect pressures and treat infected areas as needed.

    In the Coastal Bend, daytime temperatures climbed into the mid-80s, with nighttime lows in the low 70s. Precipitation was light and widely scattered, bringing little relief to droughty conditions. The crop is progressing well, but would benefit from a substantial rainfall. Producers were busy finishing planting as the planting deadline was April 15.

    In the Blackland Prairies, conditions were humid and partly sunny. Daytime high temperatures ranged from the mid-70s to low 90s. Nightly temperatures were in the 50s to low 70s. Thunderstorms entered the area late in the period bringing around half of an inch of rainfall. Planting was getting underway.

    In Kansas, cooler temperatures prevailed as daytime highs dropped from the low 80s to upper 50s late in the period. Nighttime lows were in the 30s and 40s. Rainfall was in the nearby forecast. Topsoil and subsoil moisture were mostly adequate.

    In Oklahoma, a cold front brought windy conditions and lowered daytime temperatures into the upper 60s to mid-50s. The area received some much-needed moisture with rainfall measuring at one and one-quarter inches. Field activities continued.

    West Texas

    Spot cotton trading was moderate. Supplies and producer offerings were light. Demand was light. Average local spot prices were higher. 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. Medical communities administered vaccinations.

    A cold front brought windy and partly cloudy conditions along with cooler temperatures. Daytime temperatures dropped from the upper 80s to low 50s during the week. Nighttime lows were in the 40s. Droughty conditions continued with only trace amounts of rainfall entering the area. Producers pre-watered fields and pre-planting activities continued uninterrupted in the High Plains and Southern Low Plains. Planting will be delayed until ground temperatures can warm to optimal levels.

    Trading

    East Texas

    • In Oklahoma, a light volume of color 21-33, leaf 2 and 3, staple 33-36, mike 38-41, strength 28-30, uniformity 78-80, and 25 percent extraneous matter sold for around 75.00 cents per pound, FOB car/truck (compression charges not paid).
    • In Kansas, a moderate volume of color mostly 31and 41, leaf 3-5, staple 33-37, mike 25-38, strength 23-30, uniformity 76-80, and 50 percent extraneous matter sold for around 63.00 cents, same terms as above.
    • A heavy volume of CCC-loan equities traded for around 22.75 cents.

    West Texas

    • A heavy volume mixed lot of color 21-52, leaf 2-6, staple 34 and 35, mike averaging 45.9, strength averaging 29.9, uniformity averaging 80.1, and 50 percent extraneous matter sold for around 78.00 cents per pound, FOB car/truck (compression charges not paid).
    • A light volume of color 22-33, leaf 2-4, staple 33-36, mike 31-45, strength 25-31, and uniformity 77-83, sold for around 71.00 cents, same terms as above.

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was inactive. Supplies and demand were light. Average local prices were higher. 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. Businesses, public centers, and schools expanded openings throughout the DSW.

    Weather conditions were partly cloudy and temperatures were mostly in the 90s, but dropped into the mid-to-low 80s mid-week. Planting continued in much of Arizona. Some producers were finished with planting. Normal crop development was reported in Yuma. Dry conditions persisted. According to the Arizona Department of Water Resources and the Central Arizona Project, a shortage declaration was expected to be declared by the U.S. Bureau of Reclamation which would affect water deliveries to the agricultural industry using Colorado River water in 2022.

    The small water allotment from the San Carlos irrigation district was delivered to producers around the Coolidge area. Sources reported that producers in that district will be pumping water from wells to irrigate their fields the rest of the growing season. New Mexico and El Paso, TX area producers began planting. Red flag warnings were in effect in New Mexico and El Paso, TX as strong winds produced dust and low humidity levels increasing fire danger.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies and demand were light. Average local prices were higher. 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. California businesses, public centers, and schools are open, with limited capacity.

    A ridge of high pressure kept daytime temperatures above average for most of the period. Daytime high temperatures were in the high 70s to low 80s. Strong winds were prevalent in the period. Late week, no measurable rainfall was received on the Valley floor; but in the Sierra Nevada Mountain range snow fell in the highest elevations. Planting neared completion. Some cotton was up and in the cotyledon stage.

    American Pima (AP)

    Spot cotton trading was inactive. Supplies and demand of 2020-crop were moderate. 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. Mills inquired for 2021-crop cotton, mostly for price discovery. Shipping cotton remains a concern, due to West Coast port congestion.

    Different variants of the COVID-19 virus worldwide remain a concern as vaccination eligibility expanded across the U.S. Restaurants and other public centers were opening to increased capacity, as well as schools.

    Temperatures were in the mid-70s to high 90s in the Far West. The Far West region drought status intensifies. No moisture was recorded in the period. Planting continued in Arizona, California, New Mexico and El Paso, TX. Strong winds continued in the region prompting red flag warnings in New Mexico and El Paso, TX. Fieldwork was limited until winds subsided.

    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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