Weekly Cotton Market Review – USDA

Spot quotations were 269 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 80.94 cents per pound for the week ending Thursday, April 22, 2021.

The weekly average was up from 78.25 cents last week and from 49.75 reported the corresponding period a year ago. Daily average quotations ranged from a low of 79.25 cents Friday, April 16 to a high of 82.05 cents Wednesday, April 21.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 22 totaled 5,810 bales. This compares to 9,132 reported last week and 18,459 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,338,262 bales compared to 1,426,206 bales the corresponding week a year ago. The ICE July settlement price ended the week at 86.05 cents, compared to 86.26 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #1 FOR UPLAND COTTON April 22, 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 29, 2021, allowing importation of 8,126,524 kilograms (37,324 bales of 480-lbs) of upland cotton.

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Quota number 1 will be established as of April 29, 2021 and will apply to upland cotton purchased not later than July 27, 2021 and entered into the U.S. not later than October 25, 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 inactive. 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.

Widespread showers brought light to moderate precipitation to areas across south Alabama, the Florida Panhandle, and Georgia over the weekend. Mostly clear, breezy, and sunny weather prevailed later in the week. Daytime high temperatures were in the mid-60s to upper 70s. Precipitation totals measured 1 to 2 inches. Fieldwork was delayed in areas that received moisture.

Elsewhere, planting was getting underway and producers irrigated fields that missed significant precipitation in recent weeks. Producers applied fertilizer. A mix of sunny to overcast conditions were observed during the period. Daytime high temperatures were mostly in the lower to upper 70s.

Scattered showers brought moisture to coastal North Carolina and Virginia early in the week. Precipitation totals measured from one quarter to one-half of an inch of moisture. Fieldwork continued uninterrupted and producers applied fertilizer. Planting had begun in some areas.

Textile Mill

Buyers for domestic mills purchased a light volume of color 31, leaf 3, and staple 36 for nearby delivery. Mill buyers purchased a moderate volume of 2021-crop cotton, color 41, leaf 3, and staple 35 and longer for November/December delivery. No additional sales were reported. Yarn demand was good. Labor shortages continued to affect operating schedules and some locations were idled due to lack of personnel. 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

  • A light volume even-running lot of color 51, leaf 4 and 5, staple 37 and 38, mike 43-49, strength 27-29, and uniformity 80-82 sold for around 76.50 cents per pound, 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. A light volume of cotton forfeited to the CCC-loan. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy and supply chains. Daily infection rates in the United States were trending higher over the past few weeks in many areas. The pace of vaccinations has declined.

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Clear and mild conditions prevailed for most of the week. No rainfall was reported. Daytime highs were mostly in the 60s, but dropped into the 50s as a cold front brought high winds and lower temperatures mid-week. Overnight temperatures were in the 30s and 40s. The National Weather Service issued a frost warning for the Memphis territory on Thursday, April 22, noting that vegetation susceptible to freezing could be damaged if left uncovered.

Fieldwork progressed steadily in most areas; no cotton planting was reported but is expected to get underway in the next week to 10 days. 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. A light volume of cotton forfeited to the CCC-loan. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy. Daily infection rates in the United States were trending higher over the past few weeks in many areas. The pace of vaccinations has declined.

Sunny and warm conditions prevailed for most of the week. No precipitation was reported. Daytime highs were mostly in the 70s, but dropped into the 60s as a cold front brought lower temperatures mid-week. Overnight temperatures were in the 30s and 40s. Fieldwork progressed at a steady pace throughout the region.

According to the National Agricultural Statistics Service’s Crop Progress report released on April 19, planting was underway at 2 percent in Louisiana and 1 percent in Mississippi. Producers and other members of the cotton industry participated in virtual industry events and educational seminars.

Trading

North Delta

  • A light volume of color 42 and better, leaf 6 and better, staple 37 and longer, mike averaging 42.7, strength averaging 32.6, and uniformity averaging 83.9 forfeited to the CCC-loan for 70.00 cents per pound, FOB warehouse.

South Delta

  • A light volume of color 51 and better, leaf 5 and better, staple 36 and longer, mike averaging 45.8, strength averaging 31.0, and uniformity averaging 82.2 forfeited to the CCC-loan for 15.00 cents per pound, FOB warehouse.

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 inactive. Foreign inquiries were light. Interest was best from Pakistan, Taiwan, and Vietnam. Logistics were impacted by the COVID-19 Pandemic and port congestion. Medical communities administered vaccinations.

In the Rio Grande Valley, scattered showers were received but more rainfall is needed to ease droughty conditions. Stands continued to progress and irrigation water was applied. Insects were light and monitored by industry experts and producers. Insecticide was applied in some fields. Beneficial showers brought a few tenths up to an inch of rainfall in the Coastal Bend and Upper Coast. Stands varied from emergence to 5 true leaves.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on April 19, seed sown was 16 percent in Texas, up 3 percent from last week and the five-year average. The soil was dry in most of the fields that have been planted.

Kansas received around four and one-half inches of snow in some areas and a dusting further east. The sun came out and quickly melted any accumulations. Rainfall is in the nearby forecast. Fieldwork was interrupted from soggy soils. Some producers decided to plant sorghum because of good prices. Several stripper planters were offered for sale.

Topsoil moisture was rated 4 percent very short, 13 short, 76 adequate, and 7 percent surplus, according to NASS. Subsoil moisture was rated 8 percent very short, 15 short, 72 adequate, and 5 percent surplus. Soybeans and corn were planted in Oklahoma. Ground temperatures were not optimal for cotton planting.

West Texas

Spot cotton trading was slow. 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. Interest was best from Pakistan, Taiwan, and Vietnam. Cotton logistics continued to be negatively impacted by the COVID-19 Pandemic and port congestion.

Weather conditions were mostly frigid with daytime highs in the low 50s to low 70s and overnight temperatures in the upper 20s to mid-40s. Most locations experienced freezing temperatures that damaged alternative crops. Fieldwork progressed slowly with periods of gusting winds up to 40 miles per hour and blowing dirt. Field preparation was nearly completed with fertilizer and herbicide applications.

Limited pre-watering was underway if availability allowed. The Rolling Plains received up to two and one-half inches of beneficial moisture. Texas Agrilife Extension hosted Auxin and Private Pesticide Applicator Training. Hybrid industry meetings were held.

Trading

East Texas

  • In Kansas, a light volume of color 42 and better, leaf 2-4, staple 35-37, mike 32-38, strength 28-31, and uniformity 78-82 sold for around 78.00 cents per pound, FOB car/truck (compression charges not paid).
  • A moderate volume of color 41 and 51, leaf 6-8, staple 36 and 37, mike 29-33, strength averaging 32.8, uniformity averaging 81.1, and 50 percent extraneous matter sold for around 65.00 cents, same terms as above.
  • In Oklahoma, a moderate volume of color 31 and better, leaf 1 and 2, staple 38 and longer, mike 35-49, strength 29-36, and uniformity 79-83 sold for around 86.00 cents, same terms as above.

West Texas

  • An even-running lot containing a light volume of color 11 and 21, leaf 1 and 2, staple 34 and longer, mike 35-49, strength 27-30, and uniformity 78-81 sold for around 81.75 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume containing color 21 and 22, leaf 2 and 3, staple 35 and longer, mike 34-40, strength 29-31, and uniformity 80-82 sold for around 80.00 cents, same terms as above.
  • A mixed lot containing a light volume of color 31, 32, and 42, leaf 3 and 4, staple 35 and 36, mike 32-38, strength 28-30, uniformity averaging 79.4, and 50 percent extraneous matter sold for around 71.50 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 domestic mill activity was reported. Foreign mill inquiries were moderate. West Coast port congestion remains a concern, but slight improvements were noted. Export sales were steady. Interest was best for color 31 and better, leaf 3 and better, and staple 37 and longer. Different variants of the COVID-19 virus worldwide slowed economic progress. In the U.S., various stimulus programs increased consumer spending.

In central Arizona, conditions were mostly sunny with temperatures in the 80s. Planting continued. In Normal crop development was reported in Yuma. New Mexico and El Paso, TX planting continued. Dry conditions persisted in the DSW.

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. Interest was best for color 21 and better, leaf 2 and better, and staple 38 and longer. Shipping cotton remains a concern, due to West Coast port congestion. Different variants of the COVID-19 virus worldwide slowed economic progress. Various government stimulus programs boosted states’ economic recovery efforts.

Daytime high temperatures were mostly in the 80s. The crop is off to a good start. Seedlings withstood some windy days from the week before. The crop made good progress. The California governor declared a drought emergency for two Northern California counties. No statewide declaration was mentioned, although some cities were already encouraging and scaling back water usage. As a reminder, the California Department of Water Resources adjusted water deliveries to 5 percent of requested amounts in late March.

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 of 2020-crop cotton continued, but prices were higher. Interest was best from Japan, Pakistan, Peru, and Thailand. Mills inquired for 2021-crop cotton, mostly for price discovery.

Shipping cotton remains a concern, due to West Coast port congestion. Shippers managed split shipments and rolled bookings. Different variants of the COVID-19 virus worldwide remained a concern. In the U.S., various stimulus programs increased consumer spending

Temperatures were mostly in the 80s for Arizona and California. In New Mexico and El Paso, TX, temperatures were variable, but mostly in the 70s. No moisture was recorded in the period for the region. Planting continued in New Mexico and El Paso, TX. Local sources around the Lubbock area indicated plantings will be lower than expected due to the drought.

No planting was reported. The crop was off to a good start in Arizona and California. The California governor declared a drought emergency for two northern California counties. No statewide declaration was mentioned, although some cities were already encouraging conservation and scaling back water usage. As a reminder, the California Department of Water Resources adjusted water deliveries to 5 percent of requested amounts in late March.

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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