Weekly Cotton Market Review – USDA

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Average spot quotations were 89 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 84.03 cents per pound for the week ending Thursday, May 6, 2021.

The weekly average was down from 84.92 cents last week, but up from 50.02 reported the corresponding period a year ago. Daily average quotations ranged from a low of 82.99 cents Tuesday, May 4 to a high of 86.40 cents Thursday, May 6.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 6 totaled 2,327 bales. This compares to 10,838 reported last week and 5,311 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,351,427 bales compared to 1,458,876 bales the corresponding week a year ago. The ICE July settlement price ended the week at 90.58 cents, compared to 86.54 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #3 FOR UPLAND COTTON May 6, 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 May 13, 2021, allowing importation of 8,126,524 kilograms (37,324 bales of 480-lbs) of upland cotton.

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Quota number 3 will be established as of May 13, 2021 and will apply to upland cotton purchased not later than August 10, 2021 and entered into the U.S. not later than November 8, 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 lower. Producers took advantage of higher ICE futures to fix prices and forward contract a light volume of 2021-crop cotton. 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 across the region during the period. Daytime high temperatures were mostly in the 80s to low 90s. Severe thunderstorms moved across the lower Southeast over the weekend and early in the week. Heavy wind, hail, and tornadoes accompanied the storms downing trees, power lines, and damaging buildings. Areas of north Alabama, north Georgia, south Alabama, and the Florida Panhandle received downpours of more than 4 inches.

Flash flooding was observed in some locales. Planting had advanced at a good pace ahead of the rain events, but remained slightly behind the five-year average, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report. A period of warm and sunny weather was needed to help dry saturated soils and allow planting and fieldwork to resume.

Sunny weather over the weekend gave way to cloudy skies and wet weather entering the week. Daytime high temperatures were mostly in the low 80s to low 90s. Widespread showers brought moisture to areas throughout the upper Southeast. Precipitation totals measured from one-half of an inch in areas throughout North Carolina and Virginia to up to four inches in areas of central South Carolina.

Field activities were delayed in the wettest areas. However, fieldwork advanced at a good pace ahead of the rain events and planting was slightly ahead of the five-year average in the Carolinas and Virginia, according to NASS.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 and longer for fourth quarter 2021 and first quarter 2022 delivery. No sales were reported. Yarn demand was good. Labor shortages continued to affect operating schedules and some locations remained idled due to lack of personnel. Personal protective equipment continued to be produced for frontline workers and consumers.

Demand through export channels was light. Inquiries were limited as governments throughout South Asia have restricted production and implemented lockdown rules to combat surging COVID-19 outbreaks.

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 slow. 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 declined in many areas.

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Cloudy to partly cloudy conditions prevailed for most of the week. Daytime highs were in the 70s to mid-80s. Overnight temperatures were in the 40s to 60s. Nearly 3 inches of rain fell during the period. Soil moisture levels were mostly surplus. The National Weather Service issued a River Flood warning for the northern part of the Memphis territory.

Field activities were delayed for several days until soft soils could dry sufficiently to support equipment. More rain is in the extended forecast. According to the National Agricultural Statistics Service’s Crop Progress report released on May 3, planting was underway at 7 percent in Arkansas, 3 in Missouri, and 2 percent in Tennessee.

Producers and other members of the cotton industry participated in virtual industry events and educational seminars, including the American Cotton Shippers Association’s Annual Convention.

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. Daily infection rates in the United States were trending higher over the past few weeks in many areas. The rate of vaccinations has slowed in many states.

Cloudy to partly cloudy conditions dominated the weather pattern. Daytime highs were in the 80s. Overnight temperatures varied from the 50s to 70s as a cold front moved through the region late week. Thunderstorms during the week brought over 3 inches of rain to many places. Fieldwork was delayed in areas where soils were too soft to support equipment. Soil moisture was rated at adequate to surplus in most places; flooding was reported in areas already saturated from frequent rain showers.

According to the National Agricultural Statistics Service’s Crop Progress report released on May 3, planting was underway at 15 percent in Louisiana and 10 percent in Mississippi. These figures were about a week behind the five-year average. Producers and other members of the cotton industry participated in virtual industry events and educational seminars, including the American Cotton Shippers Association’s Annual Convention.

Trading

North Delta

  • A light volume of CCC-loan equities traded for around 26.00 cents per pound.

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 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, India, Taiwan, and Vietnam. The COVID-19 Pandemic continued to impact commodity markets and has slowed the distribution of farming chemicals. Medical communities hosted COVID-19 vaccination clinics.

The Rio Grande Valley received up to 3 inches of beneficial precipitation with daytime temperature highs in the upper 70s to low 90s. Some acres have failed and will be planted to other crops. The cotton was considered late because of a freeze that occurred in February during planting time. Stands had begun to square. Irrigation was applied if available.

A widespread thunderstorm brought up to 8 inches of rainfall to south Texas, the Coastal Bend, and the Upper Coast. Most locations received 1 to 3 inches that left fields soggy and slowed fieldwork. The Texas A&M Agrilife Extension Service hosted the virtual Plastics in Cotton Seminar II that was well attended.

The Blackland Prairies experienced several storm fronts that brought rainfall, hail, and high winds. Tornado activity in Ellis County caused overturned semitrucks and power outages. Many homes and businesses were damaged or destroyed. Recent rainfall was reported up to 9 inches in central Texas with most areas reporting lesser amounts, according to local sources. Flooding was problematic around creeks, rivers, and stock tanks. Some cotton fields had standing water.

Planting was initiated in Kansas, but most producers were determining when the ground temperature would be optimal for sowing activities. The forecast calls for cool overnight lows that will delay planting at some locations. Light rain was received in Kansas and Oklahoma.

West Texas

Spot cotton trading was slow. 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, India, Taiwan, and Vietnam. Cotton logistics continued to be impacted by the COVID-19 Pandemic and port congestion. County health departments and local pharmacies continue to host vaccination clinics.

Thunderstorms brought precipitation, wind, and hail. Daytime highs were in the low 70s to low 90s, with overnight temperatures in the 40s to 50s. Most locations received a light amount of rainfall, but Junction received almost 2 inches of moisture. The rainfall was beneficial, but more is needed to ensure good germination at planting.

Some locations in the Panhandle were extremely dry and need a slow-soaking rain. Soil temperatures are warming to optimal planting conditions and producers were planning when to begin sowing activities. Fields were tilled. Preemergent herbicide was applied. Meetings were held.

Trading

East Texas

  • In Kansas, a light volume of color 33, leaf 4 and 5, staple 35 and longer, mike 34-37, strength 26-31, uniformity 77-81, and 75 percent extraneous matter sold for around 67.00 cents per pound, FOB car/truck (compression charges not paid).
  • In Oklahoma, a heavy volume mixed lot of color 41 and better, leaf 2-5, staple 36 and longer, mike 35-47, strength 28-35, and uniformity 78-82 sold for around 82.75 cents, same terms as above.
  • A light volume mixed lot containing color 43 and better, leaf 2-7, staple 35 and longer, mike 25-43, strength 26-32, uniformity averaging 79.9, and 75 percent extraneous matter sold for around 68.00 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 36 and 37, mike 42-45, strength 31-34, and uniformity 78-82 sold for around 83.50 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume containing color 33, leaf 4 and 5, staple 35, mike 27-33, strength 27-30, uniformity 78-81, and 75 percent extraneous matter sold for around 66.25 cents, same terms as above.
  • A mixed lot containing a light volume of color 85 and better, leaf 4 and 5, staple 34 and longer, mike 25-28, strength 26-32, uniformity 76-79, and 50 percent extraneous matter sold for around 64.50 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 lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. West Coast port congestion remains a concern, but slight improvements were noted. Different variants of the COVID-19 virus worldwide slowed economic progress. In the U.S., various stimulus programs increased consumer spending.

Hot and dry conditions continued. The crop made good progress in the DSW. Fieldwork was active with irrigations. Drought conditions continued to worsen in cotton-growing areas of New Mexico and El Paso, TX. The DSW is hopeful for a better monsoon season this summer. Producers and industry attended virtual cotton meeting events.

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. 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.

Sunny skies prevailed with temperatures in the high 80s to mid-90s. Fieldwork was active. Producers created furrows and prepared for first irrigations. Weed control was on-going with herbicide applications. No significant insect pressures were reported. Producers and industry attended virtual cotton meeting events.

American Pima (AP)

Spot cotton trading was slow. Supplies and demand of 2020-crop were moderate. Average local prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light to moderate. Offerings of 2020-crop cotton continued, and prices were firm. West Coast port congestion and COVID-19 variants in key cotton foreign ports remains a concern. Shippers managed split shipments and rolled bookings.

Hot, dry conditions prevailed in the Far West. Skies were partly cloudy to sunny with temperatures in the high 80s to high 90s. No moisture was recorded in the period. The crop made good progress throughout the region. Producers prepared for first irrigations. Producers and industry attended virtual cotton meeting events.

Trading

Desert Southwest

  • No trading activity was reported.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A light volume of mostly color 3, leaf 3, and staple 48 and longer was sold.



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