Weekly Cotton Market Review – USDA

    Defoliated cotton field ready for picking. Photo: Lance Clemmons, GW Farms.

    Average spot quotations were 271 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 91.06 cents per pound for the week ending Thursday, August 19, 2021.

    This is the highest weekly average since week ending November 17, 2011 when the average was 97.30. The weekly average was up from 88.35 cents last week and from 57.83 cents reported the corresponding period a year ago.

    Daily average quotations ranged from a season high of 91.81 cents Tuesday, August 17 to a low of 89.58 cents Thursday, August 19. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 19 totaled 3,545 bales. This compares to 1,389 reported last week and 19,101 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 7,235 bales compared to 85,938 bales the corresponding week a year ago. The ICE October settlement price ended the week at 93.47 cents, compared to 93.77 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #18 FOR UPLAND COTTON August 19, 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 26, 2021, allowing importation of 12,031,960 kilograms (55,262 bales of 480-lbs) of upland cotton.

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    Quota number 18 will be established as of August 26, 2021 and will apply to upland cotton purchased not later than November 23, 2021 and entered into the U.S. not later than February 21,  The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period April 2021 through June 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.

    Cloudy conditions were observed during most of the period with daytime high temperatures in the upper 80s to low 90s. Tropical Storm Fred made landfall early in the week and brought moderate to heavy rainfall to areas of the Florida panhandle, eastern Alabama, and western Georgia. Precipitation totals measured from 3 to 5 inches of moisture.

    Elsewhere, scattered thunderstorms brought around 1 to 2 inches of weekly accumulated moisture. Producers applied fungicides and plant growth regulators before rain events. Producers scouted fields for plant bugs and stink bugs and treated fields that met threshold limits. The crop advanced well and boll-setting progressed; bolls were cracking open in the earliest-planted fields.

    According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 16, boll-setting advanced to 84 percent complete in Alabama and 83 percent in Georgia.

    Sunny to partly cloudy conditions prevailed across the upper Southeast during the period. Daytime high temperatures were mostly in the mid-90s throughout the week. Scattered thunderstorms brought 1 to 2 inches of moisture to areas of the eastern Carolinas and Virginia during the week. The crop progressed well and boll-setting advanced.

    Producers applied fungicides and plant growth regulators. Producers scouted fields and applied treatments for bollworms and stinkbugs. According to NASS, boll-setting advanced to 90 percent in South Carolina, 85 in Virginia, and 79 percent in North Carolina.

    Textile Mill

    Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 35 for November through March delivery. No sales were reported. Yarn demand remained good and labor shortages continued to limit production capacity. Personal protective equipment continued to be produced for frontline workers and consumers.

    Demand through export channels was good. Agents for mills in Columbia and Honduras inquired for a moderate volume of mostly color 41, leaf 4, and staple 35 for 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 higher. Trading of CCC-loan equities was inactive. A light amount of forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy and supply chains.

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    The highly contagious Delta variant continues to be of great concern to national, state, local elected, and public health officials. In some cases, communities have been forced to reinstitute policies regarding the wearing of masks in public spaces, including restaurants and schools.

    Mostly overcast conditions dominated the weather pattern during the week. Daytime highs were in the upper 80s to low 90s. Overnight temperatures were in the low 70s. Rain showers on several days brought nearly 2 inches of accumulated precipitation to some parts of the region; most areas received some measurable rainfall, in some cases, the first in over three weeks. The crop responded well to the heat and moisture, but most fields still require some time to reach full yield potential.

    Fields were treated as necessary to control infestations of bollworms, plant bugs, and stink bugs. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on August 16, cotton bolls opening had advanced to 11 percent in Arkansas and 3 percent in Tennessee. No open bolls were reported in Missouri.

    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. Producers were encouraged by the increase in ICE futures prices, but most were concerned about the estimates for average yields.

    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. Producers forward contracted a light volume of new-crop cotton. The COVID-19 Pandemic continues to negatively impact the overall global economy.

    The highly contagious Delta variant continues to be of great concern to national, state, local elected, and public health officials. In some cases, communities have been forced to reinstitute policies regarding the wearing of masks in public spaces, including restaurants and schools.

    Partly cloudy to rainy conditions prevailed during the week. A series of thunderstorms brought heavy amounts of precipitation to some parts of the region. Some areas reported as much as 3 inches of rain. A few low-lying fields had standing water in the furrows. The crop continued to lag about two weeks behind the five-year average for this time of the season. Insect pressure from bollworms and plant bugs was moderate and treatments were made to control infestations.

    More fields had reached the cut-out stage in Louisiana and Mississippi. Plant growth regulators were applied to some late fields. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on August 16, cotton bolls opening had advanced to 32 percent in Louisiana and 28 percent in Mississippi.

    NASS reported that the condition of the majority of the crop in Louisiana and Mississippi was good to excellent. Producers were concerned about the prospects for average yields, but most were encouraged by the recent increase in ICE futures prices.

    Trading

    North Delta

    • Producers booked a light amount of new-crop cotton for CCC-loan equities at 34.00 to 36.00 cents per pound.

    South Delta

    • Producers booked a moderate amount of new-crop cotton for CCC-loan equities at 34.00 to 36.00 cents per pound.

    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 higher. Producer interest in forward contracting was good. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light to moderate. Interest was best from China, Korea, and Turkey. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. Hospitalization rates increased and some were at capacity.

    Harvesting activity increased in the Coastal Bend, and Rio Grande Valley. Daytime temperatures were in the low to high 90s. Stray showers briefly stalled field activity. Defoliants were applied and bolls were popping open. Picker harvesting was underway. Modules were transported to the gin yards and several gins began pressing bales.

    Stands in the Upper Coast were popping open and harvest aids were applied. Some stands exhibited hard locked bolls from untimely spring rainfall, which resulted in an estimated 10 to 20 percent yield loss. The Winter Garden area cotton fields were spared from excessive rainfall and are expected to yield like last season at 3 to 3.5 bales per acre. Harvesting is approximately one month away.

    Kansas cotton advanced with light amounts of rainfall received. Producers were encouraged with stand progress and market prices. Stands varied from full bloom to nearing cut-out. Producers expected good yields from the dryland. In Oklahoma, stands struggled to advance with daytime temperature highs in the upper 70s to low 90s. Rainfall was received most days during the period in Clinton, OK and brought over 3 inches of precipitation. Stands need a period of dry, sunny conditions to advance.

    West Texas

    Spot cotton trading was slow. Supplies and producer offerings were light. Demand was good. Average local spot prices were higher. Producers interest in forward contracting was good. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light to moderate. Interest was best from China, Korea, and Turkey. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. Hospitalization rates increased.

    Up to 8 inches of timely rainfall was received at some locations with temperature highs in the low 80s to upper 90s. Heavier amounts were received in the Rolling Plains. Additional beneficial precipitation was received at different locations throughout the reporting period. Fields were soft and fieldwork was stalled. Most stands were blooming and setting bolls. Some stands were low on fruit and others were loaded, according to area experts. Treatments were applied for plant pests if needed.

    Trading

    East Texas

    • In Texas, a heavy volume of 2019 & 2020-crop cotton containing mostly color 32 and better, leaf 5 and better, staple 37 and longer, mike 31-52, strength 26-36, and uniformity 77-84 sold for around 94.00 cents per pound, FOB car/truck (compression charges not paid).

    West Texas

    • A moderate volume of mostly 2019 & 2020-crop cotton containing color 32 and better, leaf 5 and better, staple 37 and longer, mike 31-52, strength 26-36, and uniformity 77-84 sold for around 94.00 cents per pound, FOB car/truck (compression charges not paid).
    • A light volume containing mostly color 21, 31, and 32, leaf 2-4, staple 35 and longer, mike averaging 34.0, strength averaging 31.9, uniformity averaging 81.6, and 25 percent extraneous matter sold for 50.00 to 65.00 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 higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Concerns for the COVID-19 Delta variant continued. Health departments encouraged people to get vaccinated as hospitals reach capacity.

    In Arizona, the harvested acreage forecast is 128,000 acres, up 5,000 acres from last year, according to the National Agricultural Statistics Service’s (NASS) Crop Production report released on August 12. Producers expect to harvest 330,000 bales of upland cotton, up 9 percent from last year. The crop was rated mostly good to excellent.

    Monsoonal flow brought excessive precipitation to central Arizona that interfered with irrigation schedules. Rainfall slowed fieldwork in Yuma, AZ, where harvesting had initiated. Ginning will begin in September to allow modules to accumulate on the gin yards. A reduction in the Colorado River water supply next year has producers planning for a decrease in planted acres.

    In New Mexico, cotton harvested acreage is forecast at 20,000 acres, down 6,000 acres from the previous year, according to NASS. Producers expect to harvest 40,000 bales, down 30 percent from last year. The crop was rated 19 percent poor, 40 percent fair, and 31 percent good.

    Monsoon storms have been active in New Mexico and Texas, leaving soils soft and some stands under water. Field activity was stalled. The plants were loaded with blooms and were setting bolls.

    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 COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics.

    In the SJV, daytime high temperatures were in the low to upper 100s and overnight lows were in the high 70s to low 80s. Hot, dry weather prevailed with no rainfall in the forecast. Stands rapidly developed with boll-setting at 98 percent, according to the National Agricultural Statistics Service’s Crop Progress report released on August 16. Producers ordered pre-harvest aids and readied equipment in advance of harvest season. Ginning was expected to begin in October.

    American Pima (AP)

    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 light.

    In the San Joaquin Valley, droughty conditions persisted with daytime high temperatures in the low 90s to low 100s. Stands made good progress and bolls had begun to open on the bottom of the plants. Monsoonal pressure brought rainfall to Arizona that disrupted irrigation schedules and left some fields flooded. Bolls were setting and the plants were loaded. Defoliants were applied in Yuma, AZ and picker harvesting was initiated. Ginning will be pushed into September to allow modules to accumulate on the gin yards.

    The crop made good progress with a light amount of rainfall that was deposited in the El Paso area. Widespread rainfall brought more than 2 inches of precipitation to stands around Lubbock, TX. Boll-setting advanced as heat units increased. Less acres were planted than last season, but yield is expected to be greater because of above-average rainfall and seed varieties.

    Harvested acreage forecast is 139,000 acres, down from 194,000 acres from last year, according to the National Agricultural Statistics Service’s Crop Production report released on August 12. Producers expect to harvest 371,000 bales of cotton, down from 546,500 bales harvested last year.

    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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