Weekly Cotton Market Review – USDA

Mid season cotton. Photo: Jerry Goodson, OSU

Average spot quotations were 53 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 83.18 cents per pound for the week ending Thursday, July 1, 2021.

The weekly average was up from 82.65 cents last week and from 57.56 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 84.16 cents Monday, June 28 to a low of 81.40 cents Wednesday, June 30.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended July 1 totaled 4,647 bales This compares to 725 reported last week and 14,318 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,379,793 bales compared to 1,560,238 bales the corresponding week a year ago. The ICE October settlement price ended the week at 86.49 cents, compared to 87.53 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #11 FOR UPLAND COTTON July 1, 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 July 8, 2021, allowing importation of 10,452,580 kilograms (48,008 bales of 480-lbs) of upland cotton.

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Quota number 11 will be established as of July 8, 2021 and will apply to upland cotton purchased not later than October 5, 2021 and entered into the U.S. not later than January 3, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period February 2021 through April 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.

Mostly cloudy to overcast conditions prevailed across the lower Southeast during the period. Daytime high temperatures were in the upper 80s to lower 90s. Widespread thunderstorms brought moisture to areas throughout central and south Alabama and Georgia, and the Florida Panhandle throughout the week.

Remnants of Tropical Storm Danny tracked across the region and spread rain into Georgia and Alabama late in the period. Flood advisories were issued in some areas due to heavy downpours associated with the storm. Weekly accumulated rainfall totals measured from one to two and one-half inches. Field activities were interrupted in some areas as wet conditions made fields inaccessible.

Producers applied herbicides and fertilizers where soils were firm enough to support equipment. Plant development was behind in some areas due to dry conditions early in the growing season. Squaring was well underway and boll-setting had begun in the earliest-planted fields. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released June 28, squaring advanced to 52 percent in Georgia and 25 percent in Alabama.

A mix of sunny to mostly cloudy conditions prevailed across the upper Southeast during the period, with early morning fog observed in some locales. Daytime high temperatures were mostly in the low 90s. Scattered thunderstorms brought moisture to the Carolinas over the weekend. Tropical storm Danny made landfall along the coast of South Carolina on Monday bringing sustained winds of 40 mph.

Portions of South Carolina received around one-quarter to one-half of an inch of moisture from the storm. Producers welcomed the beneficial moisture which enhanced crop development; squaring advanced and boll-setting was getting underway in the earliest-planted fields. According to NASS, squaring advanced to 32 percent in South Carolina, 31 in North Carolina, and 25 percent in Virginia.

Textile Mill

Domestic mill buyers inquired for a moderate volume of 2021-crop cotton, color 41, leaf 4, and staple 34 and longer for November 2021 through December 2022 delivery. No sales were reported. Yarn demand remained good. Mills continued to idle some shifts due to lack of available labor. Personal protective equipment continued to be produced for frontline workers and consumers.

Demand through export channels was good. Inquiries from agents throughout the Far East centered on discounted styles of cotton available for immediate-to-nearby shipment and 2021-crop cotton. No sales were reported.

Trading

  • No trading activity was reported.

South Central Markets Regional Summary

North Delta

Spot cotton trading was moderate. Supplies of available cotton and demand were light. Average local spot prices were higher. 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.

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Mostly clear to partly cloudy conditions, with hot and humid temperatures, characterized the weather during the week. Daytime highs were in the 90s. Overnight temperatures were in the 70s. Most areas reported one-quarter to three-quarters of an inch of precipitation, and soils were drying out rapidly.

More rain showers were in the short-term forecast, and any moisture would be beneficial to settle the dust and promote normal plant development, particularly in areas that have not had rain for several weeks. Crop advisers reported that some early-planted fields have been sprayed with plant growth regulators, as recent hot temperatures have promoted rapid plant growth. Insect pressure from spider mites and plant bugs intensified in many fields, which were treated to control infestations.

Multiple treatments have been made in some cases. Most fields had received their final application of fertilizer and irrigation was underway as necessary. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on June 28, squaring had reached 21 percent in Arkansas, 79 in Missouri, and 31 percent in Tennessee.

NASS released their annual Planted Acreage report on June 30, which showed that Arkansas planted 410,000 acres, Missouri 390,000, and Tennessee 310,000 acres. Acreage increased in Missouri and Tennessee compared to last season, but declined sharply in Arkansas.

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.

Variable weather prevailed throughout the week. Afternoon thunderstorms brought over 1 inch of rain to some places. Daytime highs were in the 90s. Overnight temperatures were in the 70s as hot and humid conditions prevailed throughout the region. Crop advisers reported that some fields have been sprayed with plant growth regulators as the hot weather accelerated plant development.

Insect pressure from spider mites and plant bugs intensified in many fields, which were treated to control infestations; in some cases, several treatments have been made. Fertilizer was applied and irrigation was underway, as necessary. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on June 28, squaring advanced to 59 percent in Louisiana and 16 percent in Mississippi.

NASS released their annual Planted Acreage report on June 30, which showed that Louisiana planted 120,000 acres and Mississippi 490,000 acres of cotton. Acreage decreased in both Louisiana and Mississippi compared to last season.

Trading

North Delta

  • A mixed lot of color 31 and 41, leaf 4 and better, staple 37 and longer, mike averaging 43.0, strength averaging 31.5, and uniformity 81.8 traded for around 89.00 cents per pound, FOB car/truck, (Rule 5, compression charges paid).
  • A light volume of CCC-loan equities traded for around 24.00 cents.

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 higher. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive. Foreign mill inquiries were moderate for new crop. Interest was best from China, Pakistan, and Turkey. The COVID-19 Pandemic continued to pressure commodity markets and shipping logistics.

Stands continued to set bolls in the Rio Grande Valley (RGV) with daytime temperature highs in the mid-80s to mid-90s. Several rain events deposited more than 1 inch of beneficial precipitation. Moderate to heavy rainfall flooded fields in the Upper Coast and Coastal Bend. Low-lying stands were underwater. The crop continued to bloom and bolls had begun to form in the Coastal Bend and south Texas.

Excessive rainfall and strong storms in the Blackland Prairies caused some fields to fail. The National Agricultural Statistic Service’s (NASS) Planted Acreage report was released on June 30 and reported a decrease in Texas planted acres from 6.8 to 6.7 million, compared to last year.

Beneficial rainfall was received in most Kansas locations late in the period. Producers were encouraged. More than 1 inch of additional rainfall was received in Pratt the morning of July 1. Most stands had begun to square. Some fields were treated for late season thrips and fleahoppers ahead of the rainfall. The NASS Planted Acreage report shows a decrease in Kansas planted acres from 195,000 acres to 120,000 acres, compared to last year.

In Oklahoma, soils were soggy and fieldwork was stalled. Damage was reported from excessive rainfall, but assessments were ongoing. The NASS Planted Acreage report show a decrease in Oklahoma planted acres from 525,000 acres to 490,000 acres, compared to last year.

West Texas

Spot cotton trading was moderate. Supplies and producer offerings were light. Demand was light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive. Foreign mill inquiries were moderate for new crop. Interest was best from China, Pakistan, and Turkey. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. No cost vaccinations continued to be offered for citizens ages 12 and over.

Widespread rainfall brought more than 6 inches of precipitation to a few locations and lesser amounts elsewhere. Daytime high temperatures were in the upper 70s and 80s. Industry members were encouraged with timely rainfall received across the area that boosted dryland and irrigated stands. Additional rainfall is in the holiday weekend forecast. Fields were soggy and fieldwork was limited, but scouting for insects continued.

Producers determined on a field-by-field basis if plant growth regulators were needed. Stands varied in maturity, but some had begun to square. Unfortunately, some stands were lost to hail and high winds in Dawson County. Property damage assessments in Lamesa were ongoing following severe storms. Some irrigation pivots had been blown over by 80 mile per hour straight line winds. The National Agricultural Statistic Service’s Planted Acreage report was released on June 30 and reported a decrease in Texas planted acres from 6.8 to 6.7 million, compared to last year.

Trading

East Texas

  • In Texas, a moderate volume of 2019-crop mixed lots containing color 32 and better, leaf 2-5, staple 35 and longer, mike 38-50, strength 26-35, and uniformity 79-82, sold for around 78.50 cents per pound, FOB warehouse (compression charges not paid).
  • A light volume of 2019-crop cotton color 21 and 31, leaf 2-4, staple 33 and 34, mike averaging 45.5, strength averaging 26.5, and uniformity averaging 79.7 sold for around 78.00 cents, same terms as above.
  • A light volume of 2019-crop cotton mostly color 12, leaf 2-4, staple 34, mike averaging 43.2, strength averaging 27.3, and uniformity averaging 79.4 sold for around 76.00 cents, same terms as above.

West Texas

  • A light volume mixed lot containing 2019-crop cotton color 22 and 32, leaf 4 and better, staple 36-38, mike 35-51, strength 29-35, and uniformity 79-82 sold for around 78.00 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume of 2019-crop containing color 31 and better, leaf 1-3, staple 33 and longer, mike 37-51, strength 25-33, and uniformity 77-82 sold for around 76.75 cents, same terms as above.
  • A light volume mixed lot containing 2019-crop cotton, color 24 and better, leaf 3 and better, staple 34 and longer, mike 26-51, strength 26-33, and uniformity 77-81 sold for around 75.00 cents, same terms as above.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. The Delta variant of the COVID-19 virus worldwide slowed economic progress.

Daytime high temperatures reached 117 degrees in the Phoenix area early in the period, but dropped into the mid-100s by mid-week. Humidity levels increased. Some shedding was reported, but was normal and not heavy. Yuma area fields reached peak bloom and boll-setting advanced. Afternoon thunderstorms brought rain and hail to the Safford Valley. Severe hail damage was reported in a few fields.

Industry experts generally agreed with the National Agricultural Statistics Service’s Upland Planted Acreage report on June 30. Strong thunderstorms produced heavy downpours throughout New Mexico and El Paso, TX early in the reporting period. Sources reported cotton-growing areas received beneficial slow soaking moisture. Flashflood warnings were in effect, due to 2 to 3 inches of rainfall.

Flooding was a concern in low-lying areas and around the northwest side of El Paso. No damage to the crop was reported. Triple-digit temperatures dropped into the low 70s by mid-week. Lygus and thrips were found, but not enough populations to warrant control measures. Overall, the DSW crop made good progress.

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. The Delta variant of the COVID-19 virus worldwide slowed economic progress.

Triple-digit temperatures continued. Cloudy and humid conditions were prevalent. Thunderstorms developed in higher elevations, but no moisture was recorded on the Valley floor. Insect sweeps were made, but no significant insect activity was reported. The crop made good progress. Blooming advanced. Local experts were surprised to see SJV upland acreage increased by 15,000 acres to 40,000 acres planted, according to the National Agricultural Statistics Service’s June Planted Acreage report released on June 30.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2020-crop were light. Demand was good. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. Shipper prices remained firm. Interest was best for new-crop cotton. No new-crop sales were reported. The COVID-19 Delta variant in key cotton foreign ports remains a concern.

Temperatures were in the low 100s to high 110s in the Far West. Beneficial rainfall was received throughout New Mexico and the El Paso, TX area early in the reporting period. Flooding was a problem for low-lying areas. Moisture was also received in the Safford Valley of Arizona. Hail damage was reported in a few fields. The crop made good progress in the FW. Blooming and boll-setting advanced. No significant pest pressures were reported.

According to the National Agricultural Statistics Service’s June Planted Acreage report, American Pima planted acreage is estimated at 142,000 acres total. Industry sources agreed with Arizona acreage, but commented that reported acreage in California, New Mexico, and El Paso, TX may be on the high side.

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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