Weekly Cotton Market Review – USDA

Open cotton boll. Photo: Larry Stalcup, AgFax Media

Average spot quotations were 39 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 83.64 cents per pound for the week ending Thursday, May 13. 

The weekly average was down from 84.03 cents last week, but up from 52.80 reported the corresponding period a year ago. Daily average quotations ranged from a high of 85.48 cents Friday, May 7 to a low of 80.80 cents Thursday, May 13.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 13 totaled 8,990 bales. This compares to 2,327 reported last week and 21,979 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,360,417 bales compared to 1,480,855 bales the corresponding week a year ago. The ICE July settlement price ended the week at 84.98 cents, compared to 90.58 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #4 FOR UPLAND COTTON May 13, 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 20, 2021, allowing importation of 9,364,126 kilograms (43,009 bales of 480-lbs) of upland cotton.

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Quota number 4 will be established as of May 20, 2021 and will apply to upland cotton purchased not later than August 17, 2021 and entered into the U.S. not later than November 15, 2021. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period January 2021 through March 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 weak. 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 conditions were observed across the lower Southeast during the period. Daytime high temperatures in the upper 80s cooled into the low 70s as a cold front moved across the region late week. Widespread thunderstorms brought moderate precipitation to areas across the region. Weekly accumulated precipitation totals measured from 1 inch in central Alabama and Georgia to around 3 inches in areas along the Gulf Coast.

Fieldwork and planting activity advanced as dry conditions allowed, but fields remained too soft to support equipment. Producers were evaluating damage to emerging seedlings from hail and heavy rainfall for re-planting. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released May 10, planting was underway at 27 percent in Alabama and 22 percent in Georgia.

Mostly cloudy conditions prevailed across the upper Southeast throughout the period. Daytime high temperatures varied from the mid-80s to low 60s as a cold front moved across the region. Widespread showers brought moisture to areas throughout the Carolinas and eastern Virginia. Precipitation totals measured from 1 to 2 inches. Fieldwork and planting advanced at a good pace as weather permitted. According to NASS, planting was underway at 40 percent in South Carolina, 35 in Virginia, and 25 percent in North Carolina.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2021-crop cotton, color 41, leaf 4, and staple 34 and longer for December 2021 and January 2022 delivery. No sales were reported. Yarn demand was good. Some mills remained idled due to labor personnel shortages. Personal protective equipment continued to be produced for frontline workers and consumers.

Demand through export channels was light. Inquiries were limited as governments continue COVID-19 lockdowns throughout South Asia to combat surging outbreaks.

Trading

  • A light volume of 2019-crop CCC-catalog cotton, color mostly 21 and 41, leaf 2 and 3, staple 34-36, mike 35-49, strength 28-31, and uniformity 79-81 sold for around 71.50 cents per pound, FOB warehouse (compression charges not 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 weak. 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 have been steady for the past week. The pace of vaccinations remains slow in many areas.

AgFax Weed Solutions


Cloudy to partly cloudy conditions prevailed early in the week. Clear, warm weather returned late week. Daytime highs were in the 70s to mid-80s. Overnight temperatures were in the 40s and 50s. Less than 1 inch of rain fell during the period, but soil moisture levels were mostly adequate to surplus. Field activities were delayed for several days until soft soils could dry sufficiently to support equipment.

Planting was expected to progress rapidly in the next five to seven days, with the prospect of favorable weather. According to the National Agricultural Statistics Service’s Crop Progress report released on May 10, planting advanced slowly to 19 percent in Arkansas, 10 in Missouri, and 3 percent in Tennessee. These figures were at least two weeks behind the five-year average in all areas. 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 weak. 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 have been steady. 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 cool overnight weather persisted in the region. Thunderstorms during the week brought nearly 2 inches of unnecessary rain to many places. Fieldwork was delayed in areas where soils were too soft to support equipment. Local experts in Louisiana were concerned about the rate at which cotton was being sown with the May 25th insurance cutoff date looming.

Soil moisture was rated at adequate to surplus in most places; fields remained flooded in areas already saturated from previous rain showers. According to the National Agricultural Statistics Service’s Crop Progress report released on May 10, planting had reached 30 percent in Louisiana and 35 percent in Mississippi. These figures were about two weeks behind the five-year average in Louisiana, but one week ahead in Mississippi. Producers and other members of the cotton industry participated in virtual industry events and educational seminars.

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 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 moderate. Merchants purchased a light volume of cotton forfeited to the CCC-catalog. Foreign inquiries were light. Interest was best from China, Korea, and Vietnam. The COVID-19 Pandemic continued to impact commodity markets and slowed the distribution of building materials. Medical communities expanded COVID-19 vaccination clinics for ages 12 and older.

The Rio Grande Valley received up to 5 inches of beneficial precipitation. Daytime temperature highs were in the upper 70s to mid-90s, with overnight lows in the 70s. Producers were encouraged as the crop made good progress with recent rainfall. Local sources estimated that 50 percent of the dryland crop remains and has regained vigor. Insecticidal treatments to control aphids and thrips were applied. Stands in the Winter Garden area received hail and some irrigated fields were replanted, causing the crop to be late.

The south Texas cotton crop advanced. Fieldwork was intermittent around thunderstorms that brought additional precipitation. Producers have worked diligently to keep fields free from weeds. Cotton planted in Texas was 25 percent completed, compared to 19 last week, and the five-year average of 23 percent, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on May 10.

Planting increased in Kansas and Oklahoma. Fieldwork was active with seed deliveries and planters sowing seed. Kansas had 13 percent planted and Oklahoma had 18 percent planted, according to the NASS. Rainfall is in the nearby forecast.

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 slow. Merchants purchased a light volume of cotton forfeited to the CCC-catalog. Foreign inquiries were light to moderate. Interest was best from China, Korea, and Vietnam.

Cotton logistics continued to be impacted by the COVID-19 Pandemic. Vaccination clinics hosted by county health departments and local pharmacies were underway. One of the vaccines received approval for ages 12 and above.

Daytime temperatures reached into the upper 90s on May 8, but cooler, rainy conditions were prevalent through the remainder of the period. Daytime highs were in the upper 50s to upper 90s, with overnight temperatures in the upper 40s to low 60s. Ground temperatures were not stable with the changing weather patterns. Planting progress was intermittently slowed due to gusting winds and thunderstorms.

Some producers opted to sow seed next week since rain is in the forecast. Cotton planted in Texas was 25 percent completed, compared to 19 last week, and 23 percent for the five-year average, according to the National Agricultural Statistics Service’s Crop Progress report released on May 10. Monitoring was underway for wireworms and thrips. Gins continued upgrading equipment and conducting routine maintenance.

Trading

East Texas

  • In Kansas, a light volume of color 11 and 21, leaf 3 and better, staple 34, mike 30-36, strength 26-31, and uniformity 77-80 sold for around 74.00 cents per pound, FOB car/truck (compression charges not paid).
  • In Oklahoma, a light volume mixed lot of color 42 and better, leaf 4-6, staple 35 and longer, mike 31-37, strength 27-30, and uniformity averaging 81.0 sold for around 68.00 cents, same terms as above.
  • A heavy volume of CCC-loan equities traded for 20.50 to 25.00 cents.
  • A light volume of 2019-crop CCC-catalog cotton, color 31 and 41, leaf 3 and 4, staple 33 and 34, mike averaging 45.2, strength averaging 28.7, uniformity averaging 79.5, and 75 percent extraneous matter sold for around 68.27 cents, FOB warehouse (compression charges not paid).

Trading

West Texas

  • An even-running lot containing a light volume of color 21 and 31, leaf 2 and 3, staple 34 and 35, mike 40-49, strength 28-30, and uniformity 77-80 sold for around 81.75 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume containing color 31, leaf 4 and better, staple 31-35, mike 42-49, strength 25-32, and uniformity 76-81 sold for around 78.50 cents, same terms as above.
  • A light volume of CCC-loan equities traded for 20.25 to 40.25 cents.
  • A light volume of 2019-crop CCC-catalog cotton, color 31 and 32, leaf 3 and 4, staple 34 and longer, mike averaging 44.2, strength averaging 29.3, and uniformity averaging 79.9 sold for around 70.15 cents, FOB warehouse (compression charges not paid).

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local prices were weak. 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.

Temperatures were in the mid-to-high 90s in Arizona. Yuma area producers irrigated the crop. Cotton plants were starting to square. The crop made good progress throughout Arizona. In New Mexico and El Paso, TX, dry conditions prevailed. According to the National Agricultural Statistics Service’s Crop Progress report released on May 10, plantings were at 29 percent compared to the five-year average of 49 percent in New Mexico.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local prices were weak. 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 high 90s. No moisture was received in the period. Weed control was on-going with herbicide applications. No significant insect pressures were reported. The crop made good progress. The USDA, Animal and Plant Health Inspection Service released a bulletin on the cotton seed bug in late April. The Valley is on alert as the pest was found in some southern California counties. Producers and industry attended the California Cotton Growers and Ginners Association meeting in Tulare, CA.

American Pima (AP)

Spot cotton trading was slow. 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, and prices were firm. According to the Foreign Agricultural Service, US Export Sales report 776,600 bales of AP cotton were committed for export for the week ending May 6.

New-crop sales stood at 4,000 bales compared to 33,800 bales last year at this time. 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. Drought conditions intensified. Temperatures were in the high 80s to high 90s. No moisture was recorded in the period. The crop made good progress throughout the region; although a particular variety was noted to have some low vigor issues and struggled to make a stand in the San Joaquin Valley (SJV) of California. The USDA, Animal and Plant Health Inspection Service released a bulletin on the cotton seed bug in late April. The SJV is on alert as the pest was found in some southern California counties.

Producers and industry attended virtual cotton meeting events in Arizona. The California Cotton Growers and Ginners Association held one of the first in-person meetings on May 12 in Tulare, CA since the start of the Pandemic 14 months ago.

Trading

Desert Southwest

  • No trading activity was reported.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • A light volume of saw-ginned cotton mostly color 2, leaf 3, and staple 44 and longer was sold for 70.00 cents per pound, FOB car/truck.



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