Weekly Cotton Market Review – USDA

Cotton insecticide spraying. ©Debra L Ferguson

Average spot quotations were 41 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 83.59 cents per pound for the week ending Thursday, July 8, 2021.

The weekly average was up from 83.18 cents last week and from 59.91 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 83.97 cents Wednesday, July 7 to a low of 83.22 cents Thursday, July 8.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended July 8 totaled 2,864 bales. This compares to 4,647 reported last week and 13,090 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,382,657 bales compared to 1,573,328 bales the corresponding week a year ago. The ICE October settlement price ended the week at 87.33 cents, compared to 86.49 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #12 FOR UPLAND COTTON July 8, 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 15, 2021, allowing importation of 10,452,580 kilograms (48,008 bales of 480-lbs) of upland cotton.

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Quota number 12 will be established as of July 15, 2021 and will apply to upland cotton purchased not later than October 12, 2021 and entered into the U.S. not later than January 10, 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 firm. 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 overcast conditions were observed across the lower Southeast during the period. Daytime high temperatures were in the mid-to-upper 80s. Widespread rainfall was received across the region. Tropical storm Elsa made landfall along Florida’s Big Bend on Wednesday, June 7 and moved across south Georgia. Weekly accumulated precipitation totals along Gulf and Atlantic coastal areas measured 2 to 5 inches. Soils were saturated in areas that received rainfall over the weekend and fieldwork was limited.

In Georgia, producers applied growth regulators in between rain events. Producers scouted fields for aphids and plant bugs and applied treatments. A period of dry weather would help soft soils to firm and allow producers to re-enter fields. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released July 6, squaring advanced to 67 percent in Georgia and 48 percent in Alabama.

Partly cloudy to overcast conditions prevailed across the Carolinas and Virginia during the period. Daytime high temperatures varied from the low 80s to low 90s. Scattered thunderstorms brought moisture to the upper Southeast over the weekend. Later in the week, tropical storm Elsa moved across the Carolinas bringing heavy rains and strong winds.

Producers monitored fields for plant bug populations and applied treatments to infestations. A period of dry and warm weather would allow soft soils to firm and fieldwork to resume. According to NASS, squaring advanced to 47 percent in South Carolina, 41 in North Carolina, and 38 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 fourth quarter 2021 through fourth quarter 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. Agents throughout the Far East inquired for any discounted styles of cotton for immediate-to-nearby shipment. No sales were reported.

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 firm. 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.

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Sunny to partly cloudy conditions prevailed across the region during the period. Daytime high temperatures were in the low 80s to low 90s. Overnight lows were in the 60s to low 70s. Scattered thunderstorms brought 1 to 2 inches of weekly accumulated moisture to areas of west Tennessee, the Bootheel of Missouri, and portions of Arkansas. Fieldwork advanced uninterrupted. The crop progressed and squaring advanced, but the crop remained two to three weeks behind in some areas.

Producers would welcome a widespread soaking rainfall to invigorate the crop. Producers scouted fields and applied treatments to combat increasing plant bug populations. Boll-setting was underway in the earliest-planted fields. According to the National Agricultural Statistics Service’s Crop Progress report released July 6, squaring advanced to 87 percent in Missouri, 58 in Arkansas, and 46 percent in Tennessee.

South Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was light. Average local spot prices were firm. 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.

Partly to mostly cloudy skies prevailed during the period with scattered shower activity observed. Daytime high temperatures were in the 80s to low 90s. Overnight lows were in the upper 60s to low 70s. Weekly accumulated precipitation totals measured from 1 to 2 inches. Producers scouted for plant bugs and spider mites and applied treatments to fields that met threshold limits. Fertilizer was applied and irrigation was underway.

Boll-setting continued in the earliest-planted fields. According to the National Agricultural Statistics Service’s Crop Progress report released July 6, squaring advanced to 75 percent in Louisiana and 39 percent in Mississippi.

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 moderate. Average local spot prices were firm. 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. Concerns increased after recent Delta variant outbreaks in south Texas.

Stand development stalled under torrential rainfall in the Rio Grande Valley (RGV) and in the Coastal Bend. Daytime temperature highs were in the low 80s to mid-90s. A low-pressure system brought more than 12 inches of precipitation to the RGV and lesser amounts to coastal areas. Heavy downpours resulted in localized flooding and many fields were underwater.

Fieldwork was at a standstill in the Upper Coast with rain in the forecast through the weekend. The southern Blackland Prairies received more rainfall than the northern counties. Stands struggled to recover in the northern counties from recent rainfall. Local reports indicated that some stands will fail.

Around 3 inches of beneficial rainfall was received in Kansas that advanced the crop. Some fields received first and second plant growth regulator treatments. Plants had begun to square. Fleahopper populations were monitored. Cotton advanced in Oklahoma with daytime temperature highs in the upper 80s to low 90s. Beneficial rainfall was received. Cultivating and herbicide spraying was active where soils were firm enough to support equipment.

West Texas

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were firm. 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 temperature highs were in the upper 80s. Heavy amounts of rainfall were received in the Rolling Plains with Snyder receiving around 7 inches of accumulated precipitation for a three-day period. Industry members were encouraged with the progress of the stands that survived the storms, except in the Panhandle.

Fields in the Panhandle had developed late and were at a standstill. City and field flooding was reported in Amarillo. Drier, sunny conditions would help the stands to catch-up. Plant growth regulators were applied on some stands to control growth and encourage fruiting. Fields were cultivated to remove weeds and sprayed to prevent new growth. Crop dusters aerially applied herbicide on soggy fields. Fleahopper infestations were treated in isolated areas.

Trading

East Texas

  • In Texas, a moderate volume mixed lot containing color 43 and better, leaf 2-5, staple 35-40, mike 39-51, strength 29-35, and uniformity 80-83, sold for around 80.50 cents per pound, FOB warehouse (compression charges not paid).
  • A light volume of 2018 and 2019-crop containing color 32 and better, leaf 4 and better, staple 35 and longer, mike averaging 43.0, strength averaging 30.7, uniformity averaging 80.9, and 75 percent extraneous matter (plastic) sold for around 18.00 cents, FOB car/truck (compression charges not paid).
  • In Kansas, a light volume of color 31 and 41, leaf 4 and 5, staple 36 and 37, mike averaging 36.5, strength averaging 30.2, uniformity averaging 81.2, and 100 percent extraneous matter sold for around 78.00 cents, same terms as above.
  • In Oklahoma, a light volume of color 31 and 41, leaf 2 and 3, staple 37, mike averaging 34.2, strength averaging 31.8, uniformity averaging 79.5, and 25 percent extraneous matter sold for around 80.00 cents, same terms as above.

Trading

West Texas

  • A light volume even-running lot containing color 11 and 21, leaf 1 and 2, staple 36 and 37, mike averaging 40.3, strength averaging 32.3, and uniformity averaging 80.8 sold for around 89.00 cents per pound, FOB car/truck (compression charges not paid).
  • A light volume containing color 21 and 31, leaf 3 and 4, staple 33-35, mike 26-30, strength 26-29, and uniformity 76-79 sold for around 72.00 cents, same terms as above.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies and demand were light. Average local prices were firm. 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 in Arizona. Daily high temperatures were in the mid-100s to mid-110s. Overnight temperatures were in the 80s to 90s. The National Weather Service issued an excessive heat warning starting on Friday, July 9 through Saturday, July 10. Humidity levels increased, but no rainfall was recorded.

By the week ending July 4, squaring reached 88 percent compared to 95 percent last year, and 41 percent reached the setting bolls stage compared to 33 percent the previous year, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report. The crop made good progress.

Daily monsoon activity brought beneficial rainfall throughout New Mexico and El Paso, TX. Field activities centered on weed control and cultivating. As wet weather moved through the territory, bug pressures increased. Some treatments were made for bollworms. According to NASS, squaring reached 20 percent compared to 34 percent the previous year. The crop made good progress.

San Joaquin Valley (SJV)

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

Daily temperatures were in the low-to-high 100s for the past 2 weeks. An excessive heat warning is in effect from noon Thursday, July 8 through 9pm on Monday, July 12. Daytime high temperatures are forecasted to be over 110 degrees, with a one-day high temperature of 114 degrees.

Nighttime low temperatures were in the mid-70s. Producers were concerned about long term daily heat and extreme temperatures. The crop was flowering and developing a good boll set. Bolls were rapidly maturing in the heat. Irrigation systems were engaged. Dry conditions kept insect pressure low.

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 and mostly for price discovery. Shipper prices remained firm for 2020 and 2021-crop.

No new-crop sales were reported. According to the Foreign Agricultural Service, U.S. Export Sales report nearly 827,700 bales of Pima cotton were committed for export for the week ending July 1. This compares to 577,200 bales the previous year. Only 4,100 bales were committed for the 2021 marketing year. The COVID-19 Delta variant in key cotton foreign ports remains a concern.

Hot, dry conditions continued in Arizona and California. Excessive heat warnings were in effect as daytime high temperatures will be over 110 degrees. Monsoon activity delivered beneficial rainfall to New Mexico and El Paso, TX in the period. The moisture moderated temperatures into the 80s and 90s. The Far West crop was squaring and setting bolls. Insect pressure was easily controlled. Several industry members participated and reviewed around 150 grade boxes in the annual American Pima Standards matching event held July 7 at the Visalia Classing Office.

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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