Weekly Cotton Market Review – USDA

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    Average spot quotations were 19 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 86.31 cents per pound for the week ending Thursday, August 5, 2021.

    The weekly average was down from 86.50 cents last week, but up from 59.28 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 85.72 cents Friday, July 30 to a high of 87.06 cents Thursday, August 5.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 5 totaled 2,301 bales. This compares to 411 reported last week and 65,659 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the end of the 2020-2021 marketing year were 1,386,959 bales compared to 1,620,966 bales at the end of the 2019-2020 marketing year. The ICE October settlement price ended the week at 91.17 cents, compared to 90.76 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #16 FOR UPLAND COTTON August 5, 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 August 12, 2021, allowing importation of 11,607,075 kilograms (53,310 bales of 480-lbs) of upland cotton.

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    Quota number 16 will be established as of August 12, 2021 and will apply to upland cotton purchased not later than November 9, 2021 and entered into the U.S. not later than February 7, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period March 2021 through May 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 steady. 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 prevailed across the lower Southeast during the period. Daytime high temperatures in the low 90s cooled into the low 80s late in the week. Intermittent thundershowers brought widespread rainfall to areas throughout Alabama, the Florida Panhandle, and Georgia throughout the week. Weekly accumulated rainfall totals measured from 1 to 4 inches, with the heaviest downpours observed across the Gulf and Atlantic coastal areas. Despite the rainfall, the crop progressed under conditions that were drier than in previous weeks.

    Cotton is blooming and setting bolls. In some areas, fields struggled to recover from excessive wet weather in recent weeks. In Florida, wilting plants were reported in some fields due to shallow root structures. In Alabama and Georgia, later planted fields suffered from lack of fertilizer and herbicide applications in recent weeks. Stink bugs populations were increasing.

    According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 2, squaring neared completion and boll-setting advanced 66 percent in Alabama and 62 percent in Alabama.

    Mostly cloudy conditions dominated the weather pattern across the upper Southeast during the period. Daytime high temperatures in the mid-90s cooled into the mid-70s to low 80s late in the week. Widespread thundershowers brought moisture to areas throughout the eastern Carolinas and Virginia. Weekly accumulated precipitation totals measured from 1 to 3 inches, with heavier downpours observed locally.

    Hot and humid conditions early in the period helped the crop advance. Producers applied fertilizers and herbicides in between rain events as dry conditions allowed. Producers scouted fields for plant bugs and stink bugs. According to NASS, squaring neared completion and boll-setting advanced to 66 percent in South Carolina, 61 in Virginia, and 57 percent in North Carolina.

    Textile Mill

    Domestic mill buyers booked a light volume of color 42 and 51, leaf 5 and better, and staple 32 and longer for January through March 2022 delivery. Mill buyers also inquired for a moderate volume of 2021-crop cotton, color 41, leaf 4, and staple 34 and longer for January through October 2022 delivery. Yarn demand remained good and mills continued to struggle to meet product demand as labor issues continued to limit production capacity. Personal protective equipment continued to be produced for frontline workers and consumers.

    Demand through export channels was good. Turkish mill buyers purchased a moderate volume of color 31, leaf 3, and staple 37 for August/September shipment. Agents for mills in Pakistan purchased a moderate volume mixed lot recap containing color mostly 41 and 51, leaf 5 and better, and staple 34 and longer for prompt shipment.

    Malaysian mill buyers inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 37 for November/December shipment. Agents for mills in Pakistan inquired for a moderate volume of color 41, leaf 4, and staple 37 for January through March 2022 shipment.

    Trading

    • No trading activity was reported.

    South Central Markets Regional Summary

    North Delta

    Spot cotton trading was slow. Supplies of available cotton and demand were light. Average local spot prices were steady. 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. The highly contagious Delta Variant has resulted in a spike in COVID-19 cases, which in turn has caused national, state, and local officials to reinstitute policies regarding the wearing of masks in public spaces.

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    Moderate conditions dominated the weather pattern during the week. Daytime highs dropped into the 80s, providing some relief from the extremely hot temperatures of the previous week. Overnight temperatures were in the mild 60s and 70s. Trace amounts of precipitation were reported in some parts of the region; some areas have not received any rainfall in nearly two weeks. The crop responded to the hot weather, but remained behind the five-year average.

    Producers continued to apply plant growth regulators to control excessive vegetative growth and promote fruit retention. Fields were treated as necessary to control infestations of plant bugs and stink bugs. A few spider mite hotspots were also treated. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on August 2, boll-setting had advanced to 90 percent in Arkansas, 74 in Missouri, and 51 percent in Tennessee.

    NASS reported that the condition of the majority of the crop in Arkansas and Missouri was good to excellent, while it was rated fair to good in Tennessee.

    South Delta

    Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were steady. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy. The spike in COVID-19 cases, due to the highly contagious Delta variant, has caused national, state, and local officials to reinstitute policies regarding the wearing of masks in public spaces.

    A series of storm fronts brought heavy rainfall to parts of Louisiana during the week. Some areas reported as much as 7 inches of rain; most other places received from 1 to 2 inches of precipitation. The crop continued to lag about 1 week behind the five-year average for this time of the season. Insect pressure from bollworms and plant bugs was mostly light and easily control. Producers applied plant growth regulators.

    Some boll shedding was reported due to uncontrolled vegetative growth and excessive rainfall. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on August 2, boll-setting had advanced to 82 percent in Louisiana and 64 percent in Mississippi. NASS reported that the condition of the majority of the crop in Louisiana and Mississippi was good to excellent.

    Trading

    North Delta

    • A light volume, even-running lot of color 41, leaf 4, staple 37, mike 35-46, strength 28-32, and uniformity 79-82 traded for around 93.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).
    • A light volume mixed lot of mostly color 51 and better, leaf 4 and better, staple 37 and longer, mike 43-52, strength 28-32, and uniformity 78-82 traded for around 22.00 cents, same terms as above.

    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 good. Average local spot prices were steady. Producer interest in forward contracting was good. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light for new crop. Interest was best from Pakistan, Taiwan, and Turkey.

    The COVID-19 pandemic continued to place pressure on commodity markets and shipping logistics. No cost vaccinations continued to be offered. Masks requirements have returned for some business and government offices. Hospitalization rates increased.

    Harvesting preparations were stalled in the Coastal Bend and Rio Grande Valley (RGV). Daytime temperatures were in the low to mid-90s. Some areas received up to 3 inches of rainfall that left soils soft. Bolls were popping open and harvest season is nearby in the RGV. The crop remained two to three weeks behind schedule in the Upper Coast. Some stands have a few bolls opening. Heavy thunderstorms brought up to 5 inches of rainfall to east Texas, that left soils too soggy to support field equipment. The crop advanced. Insecticides and growth regulators were applied.

    In Kansas, boll-setting had reached 43 percent, ahead of the 23 percent five-year average, according to the National Agricultural Statics Service’s (NASS) Crop Progress report released on August 2. Scattered thunderstorms brought rain and hail. Some acreage was lost to hail damage. In Oklahoma, irrigation was underway, and the crop was promising. Producers were encouraged. Insects were present, but the beneficials kept infestation levels low. Boll-setting was 23 percent, compared to the 34 percent five-year average, according to NASS.

    West Texas

    Spot cotton trading was slow. Supplies and producer offerings were light. Demand was good. Average local spot prices were higher. Producer interest in forward contracting was good. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light for new crop. Interest was best from Pakistan, Taiwan, 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 older. Hospitalization rates increased. Required masks and socially distancing mandates have returned for some commercial settings.

    Early in the reporting period, fieldwork was interrupted by wide-spread rainfall that brought up to three and three-fourths inches of rainfall. Daytime temperature highs were in the low 70s to upper 90s. Sunshine returned mid-week and heat units began to build. The crop advanced and most fields had begun to bloom. Irrigation was restarted.

    Industry members hoped for clear and warm conditions through October so the crop can develop and maximize yield potential. Insect populations increased and treatments were applied for fleahoppers, and tarnished plant bugs where needed. Fields were monitored for bollworms. Weeds were removed by hand. Plant growth regulators were applied to help retain fruit.

    Trading

    East Texas

    • In Oklahoma, a heavy volume containing color 31 and 41, leaf 2 and 3, staple 34 and longer, mike 39-50, strength 30-37, and uniformity 79-83 sold for around 95.00 cents per pound, FOB car/truck (compression charges not paid).
    • A light volume containing color 31, leaf 3, staple 35 and 36, mike 39-43, strength averaging 30.5, and uniformity 75-80 sold for around 90.00 cents, same terms as above.

    West Texas

    • A light volume containing color 21 and 31, leaf 2 and 3, staple 32-34, mike 34-39, strength 25-29, and uniformity 77-80 sold for around 82.50 cents per pound, FOB car/truck (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 steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate and mostly for the purpose of 2021-crop price discovery. The COVID-19 virus Delta variant cases increased throughout the region. Some locales have mask mandates back in place.

    Monsoon rains helped to improve droughty conditions, but the relief was brief as daily temperatures in Arizona climbed to almost 117 degrees. Nighttime lows were in the mid-80s. According to the U.S. Drought Monitor released August 5, extreme drought conditions dissipated, leaving most areas in severe drought conditions.

    Preparations continued to ready equipment for harvest in Yuma, Arizona. Setting and opening bolls exceeded the five-year average. Sunny to partly cloudy conditions were seen in New Mexico and El Paso, TX. Daytime temperatures ranged from the upper 80s to upper 90s. Sources reported that the crop made good progress and was in better than average condition.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies and demand were light. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate and mostly for the purpose of available supplies of 2020-crop and for 2021-crop price discovery. The Delta variant of the COVID-19 virus cases increased in California. Some cities revived mask mandates.

    Triple-digit daily temperatures prevailed at the beginning of the period, with a cool down into the upper 90s late in the period. Nightly temperatures were in the 60s. No substantial amount of rain was recorded. According to the U.S. Drought Monitor released August 5, drought conditions continue to be over 90 percent in the exceptional drought category.

    The crop is in good to excellent condition, with many growers reporting the crop a week ahead of schedule. Blooming continued. Field activity consisted of irrigating cotton. Insect pressure was light. Producers indicated the crop made good progress.

    American Pima (AP)

    Spot cotton trading was inactive. Supplies of 2020-crop were light. Demand was very good. Average local prices were steady. No forward contracting was reported. Foreign mill inquiries were moderate. Shipper prices remained firm for 2020 and 2021-crop. No new-crop sales were reported. The COVID-19 Delta variant in key cotton foreign ports and the U.S. remains a concern.

    According to the Foreign Agricultural Service, U.S. Export Sales report 843,800 bales of Pima cotton were committed for export for the week ending July 29. This compares to 603,500 bales the previous year. Approximately 14,600 bales were committed for the 2021 marketing year.

    Weather conditions were mostly hot and dry throughout the Far West. No rainfall was recorded in the San Joaquin Valley (SJV) of California. No insect pressure was reported in the region. Bolls were cracking open in Yuma, AZ. Overall, the crop continues to make good progress throughout the region.

    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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