Weekly Cotton Market Review – USDA

Average spot quotations were 91 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 79.41 cents per pound for the week ending Thursday, June 3, 2021.

The weekly average was up from 78.50 cents last week and from 55.22 reported the corresponding period a year ago. Daily average quotations ranged from a low of 77.94 cents Friday, May 28 to a high of 80.07 cents Tuesday, June 1.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended June 3 totaled 252 bales. This compares to 744 reported last week and 24,003 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,362,548 bales compared to 1,526,086 bales the corresponding week a year ago. The ICE July settlement price ended the week at 84.21 cents, compared to 82.61 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #7 FOR UPLAND COTTON June 3, 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 June 10, 2021, allowing importation of 9,364,126 kilograms (43,009 bales of 480-lbs) of upland cotton.

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Quota number 7 will be established as of June 10, 2021 and will apply to upland cotton purchased not later than September 7, 2021 and entered into the U.S. not later than December 6, 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 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 was observed across the lower Southeast during the period. Daytime high temperatures were in the upper 80s to low 90s. Scattered showers brought localized pockets of moisture to areas throughout Alabama and Georgia. Weekly accumulated rainfall totals measured from no rain to 2 inches.

Many areas have missed significant precipitation in recent weeks and abnormally dry conditions expanded in portions of east and south central Georgia and northwest Alabama, according to the U.S. Drought Monitor. Planting advanced without interruptions, but the dry conditions slowed the planting of cotton in some non-irrigated fields throughout the region.

Producers sprayed fields to reduce pressure from thrips on young plants. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released June 1, planting advanced to 89 percent in Alabama and 78 percent in Georgia.

Mostly cloudy skies dominated the weather pattern across the upper Southeast during the period. Daytime temperatures varied from the low 80s to the low 90s. Scattered showers brought localized moisture to portions of the Carolinas early in the period and late in the week. Rainfall totals measured from trace amounts to around 2 inches.

Producers welcomed the moisture as moderate to severe drought conditions persisted in cotton growing areas. Planting continued without interruption, but slowed in some areas due to dry conditions. According to NASS, planting advanced to 85 percent in South Carolina, and 80 percent completed in North Carolina and Virginia.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2021-crop cotton, color 41 and better, leaf 4 and better, and staple 34 and longer for fourth quarter 2021 through fourth quarter 2022 delivery. No sales were reported. Yarn demand remained good and mills continued to operate below capacity, due to persistent labor personnel shortages. Personal protective equipment continued to be produced for frontline workers and consumers.

Demand through export channels was light. Agents for mills in India inquired for a moderate volume of color 31, leaf 3, and staple 35 and longer for July shipment. Vietnamese mill buyers inquired the same quality for September/October shipment. Agents for mills in Bangladesh inquired for light spotted styles of cotton for July through September shipment. No sales were reported.

Trading

  • A very light volume of color 42-53, leaf 4-6, staple 37 and longer, mike 37-49, strength 28-30, uniformity 79-81, and 75 percent extraneous matter sold for around 68.00 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. 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.

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Cloudy to partly cloudy conditions prevailed during the week. Daytime highs were in the 80s to low 90s. Overnight temperatures were in the 50s and 60s. Up to 3 inches of rain fell in the northern areas, and soil conditions were soggy. Planting progressed moderately during the week under less than favorable weather conditions. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on June 1, planting was nearly complete at 92 percent in Arkansas, 98 in Missouri, and 92 percent in Tennessee.

NASS also reported that squaring was underway in a few fields in Tennessee, and the condition of the majority of the crop overall was fair to good. 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. Daily infection rates in the United States have been steady recently. The rate of vaccinations has slowed in many states.

Persistent rainfall dominated the weather pattern in parts of Louisiana. Scattered storm systems brought up to 3 inches of rain to some places. River flood warnings remained in effect in parts of the state. Daytime highs were in the low 90s. Overnight temperatures varied from the 60s to 70s as warm, moist weather lingered throughout the region. Fieldwork was delayed in areas where soils were too soft to support equipment. Soil moisture was rated at adequate to surplus in most places; low-lying fields remained saturated in areas already wet from frequent rain showers.

According to the National Agricultural Statistics Service’s Crop Progress report released on June 1, planting advanced slowly to just 63 percent in Louisiana, but reached 83 percent in Mississippi. Planting in Louisiana remained at least two weeks behind the five-year average, but the condition of the planted acreage was rated as mostly good in both states. 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 slow. Supplies and producer offerings were light. Demand was light. Average local spot prices were higher. A light volume of forward contracting was reported. No domestic mill activity was reported. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light. The COVID-19 Pandemic continued to put pressure on commodity markets and shipping logistics.

Temperatures were in the mid-80s to low 90s in east and south Texas. Scattered thunderstorms continued in the region and produced around three quarters of an inch to one and one-half inches of rain in the period. River flood warnings were in effect for the Guadalupe River near Victoria. May was the second wettest month on record for the Coastal Bend. Fields with clay soils were impacted the most by daily moisture, which kept some fields waterlogged.

Local sources reported the crop made good progress in the Rio Grande Valley, Coastal Bend, and Upper Coast. Fields were blooming and boll-setting advanced. Producers continued to inspect for crop damage, especially in fields that are draining slowly. Monitoring for insect pests continued.

Beneficial rainfall was received in drought-stricken areas of Kansas and Oklahoma. In Kansas, precipitation totals were measured at nearly 2 inches. Some areas in central Kansas received too much rain and cooler temperatures slowed crop progress. More heat units are needed to get the crop off to a good start. Southwestern Oklahoma received timely rainfall, which certainly benefited the crop. Approximately one and one-half inches of moisture was received early in the period. At this time, the Lugert-Altus Irrigation district was not releasing water for irrigation due to low lakes levels.

West Texas

Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was light. Average local spot prices were higher. A moderate volume of 2021-crop contracting was reported. Trading of CCC-loan equities was inactive. No domestic mill activity was reported. Foreign mills inquiries were light. Interest in new crop increased. No sales were reported. The COVID-19 Pandemic continued to put pressure on commodity markets and shipping destinations. Shippers expressed concerns with shipping rates and fuel increases.

Temperatures were in the high 60s to low 70s, but gradually climbed into the 80s late in the period. Over the Memorial weekend, strong storms rolled through bringing widespread rainfall to west Texas. Around one and one-half inches to two inches of moisture was received. The rainfall was of great benefit to watersheds and sub-soil moisture. The rain kept pumps idle for irrigated fields. Lubbock received just shy of 6 inches of rain in May, which is over 3 inches above average for this time of year.

Weekend rains boosted local Lake Alan Henry to 100 percent capacity. Producers need a period of sunny, dry weather to advance planting. Local sources estimated around 40 to 50 percent of the crop was planted for the High and South Plains. The crop was emerged and made good progress. In the Rolling Plains, fields were still too wet and need hot, dry conditions to begin planting. Some fields were waterlogged. Some fields will have to be re-worked due to heavy rainfall.

Trading

East Texas

  • In Oklahoma, a light volume mixed lot of mostly color 32 and better, leaf 3 and better, staple 32, mike averaging 43.0, strength averaging 27.0, and uniformity averaging 78.5 sold for around 70.00 cents per pound, FOB car/truck (compression charges not paid).

West Texas

  • No trading activity was reported.

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 light. 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.

Triple-digit temperatures began in central Arizona in the period. Fields reached squaring stage. Producers were irrigating the crop. Partly cloudy to sunny conditions were prevalent in New Mexico and El Paso, TX. Temperatures were in the high 80s to low 90s. Drought conditions continued in the DSW. No pest pressures were reported. Overall, the crop made good progress in the region.

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 light. 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.

A heat wave entered the Valley mid-week with temperatures in the low 100s. Irrigation of fields continued. No significant pest pressures were reported. The crop made good progress.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2020-crop were light. Demand of 2020-crop was moderate. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were 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.

Temperatures were in the 80s to low 100s for the Far West (FW). No moisture was recorded in the period. FW producers continued with irrigation schedules. Light to moderate insect pressure was reported. The crop made good progress.

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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