Weekly Cotton Market Review – USDA

Photo: Clemson University Public Service and Agriculture

Spot quotations averaged 18 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 91.24 cents per pound for the week ending Thursday, August 26, 2021.

The weekly average was up from 91.06 cents last week and from 59.36 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 90.04 cents Friday, August 20 to a season high of 92.09 cents Wednesday, August 25.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 26 totaled 1,551 bales. This compares to 3,545 reported last week and 24,348 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 8,786 bales compared to 110,286 bales the corresponding week a year ago. The ICE October settlement price ended the week at 95.36 cents, compared to 93.47 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #19 FOR UPLAND COTTON August 26, 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 September 2, 2021, allowing importation of 12,031,960 kilograms (55,262 bales of 480- lbs) of upland cotton.

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Quota number 19 will be established as of September 2, 2021 and will apply to upland cotton purchased not later than November 30, 2021 and entered into the U.S. not later than February 28, 2022. 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 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.

A mix of sunny to cloudy conditions prevailed across the lower Southeast during the period. Daytime high temperatures were in the upper 80s to low 90s. Over the weekend, widespread thundershowers brought moderate precipitation to areas throughout Alabama, the Florida Panhandle, and Georgia. Later in the week, isolated pop-up storm activity was observed throughout the region.

Precipitation totals measured around one-half of an inch to two inches of precipitation, with the heaviest accumulations observed along coastal areas. A period of dry and warm weather is needed to allow water-logged soils to firm and invigorate plants. The hot and wet weather has provided favorable conditions for disease pressure in fields. Producers applied fungicides as dry conditions allowed.

Boll-rot and nutrient deficiency was reported in some fields. Increased pressure from stink bugs has also been observed. Bolls were cracking open in the earliest-planted fields. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 23, boll-setting advanced to 95 percent completed in Alabama and 90 percent in Georgia.

Mostly cloudy skies dominated the weather pattern across the upper Southeast during the period. Daytime high temperatures were mostly in the low to mid-90s throughout the week. Widespread thunderstorms brought rainfall throughout the region over the weekend, and isolated pop-up storms and early morning fog were observed during the week.

Weekly accumulated precipitation totals measured from around one-half of an inch to two inches of moisture. Fieldwork was limited due to the wet weather. Producers scouted fields and treated infestations of stink bugs. According to NASS, boll-setting advanced to 96 percent in South Carolina, 87 in Virginia, and 86 percent in North Carolina.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 35 for fourth quarter 2021 through first quarter 2022 delivery. No sales were reported. Yarn demand remained good and production capacity remained hampered by 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.

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 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 continues to be of great concern to national, state, local elected, and public health officials.

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Sunny to partly cloudy conditions dominated the weather pattern during the week. Daytime highs were in the upper 90s, with the heat index soaring well above 100 degrees. Heat advisories were issued for parts of southern Arkansas. Overnight temperatures were in the mid-70s. Brief afternoon rain showers brought up to 1 inch of precipitation to some parts of the territory. Some boll shedding was observed throughout the region.

The crop advanced thanks to the heat and moisture, but most fields still require some time to reach full yield potential. Plant growth regulators were applied to some late fields. 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 23, cotton bolls opening advanced slowly to 16 percent in Arkansas and 4 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.

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 highly contagious Delta variant continues to be of great concern to national, state, local elected, and public health officials.

Partly cloudy conditions prevailed during the week. Pop-up thundershowers brought about 1 inch of accumulated moisture during the week. Daytime highs were in the upper 90s, with the heat index rising well above 110 degrees. Heat advisories were issued for parts of Louisiana and Mississippi for several days. Overnight temperatures were in the mid-70s. Some boll shedding was reported throughout the territory.

Many fields had barely reached 5 Nodes Above White Flower (NAWF), but some fields had reached 5 NAWF plus 250 heat units and were flowering out the top. Insect pressure from bollworms, plant bugs, and spider mites varied from place to place. Treatments were made to control infestations, as necessary.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on August 23, cotton bolls opening had advanced to 39 percent in Louisiana and 33 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

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

Daytime temperatures were in the low 90s to low 100s. Light rainfall was received early in the period and thunderstorms were in the near-term forecast. Harvesting expanded in the Rio Grande Valley (RGV), Coastal Bend, and in the Upper Coast. Harvesting paced quickly working towards completion before adverse weather caused problems. Stalk destruction was underway to meet the deadline, which is September 1 in the RGV.

Extending the deadline is under consideration because of the lateness of the crop. Most gins in the RGV and Coastal Bend were open and offered pressing services. Modules were transported from the fields to gin yards. Bolls were opening in the Blackland Prairies and producers prepared to kick-off harvesting. Industry experts expected above-average yields in the southern counties.

Kansas cotton advanced and producers were encouraged. Stands were catching up under hot, dry conditions. Irrigations were terminated. Treatments were applied for bollworms. In Oklahoma, timely rainfall helped stands advance with daytime temperature highs in the upper 90s to low 100s. Some dryland fields had reached cut-out and irrigated stands continued blooming. Producers carefully determined the best time to shut down irrigation water to maximize yield.

Spotty showers have been beneficial. Quality reports can be found on My Market News located here and here. If you want to receive the Daily Cotton Quality Summary reports in your inbox, send an e-mail request to Jane.Byers-Angle@usda.gov.

West Texas

Spot cotton trading was inactive. 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 moderate. Interest was best from China, Pakistan, and Turkey. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. Hospitalization rates increased.

Sunshine was abundant with temperature highs in the low to mid-90s. Heat units accumulated and the crop advanced. Most stands were blooming and setting bolls. Recent timely rainfall boosted vigor and helped the dryland fields to progress in the Rolling Plains, but more rainfall is needed in the Panhandle. Producers determined optimal schedules to terminate irrigation water to maximize yield.

Warm, open weather in September will be needed for the crop to develop harvestable bolls. Plant growth regulators were applied to control vegetative growth and help fruiting. Insect pressure was heavy in some fields and light elsewhere. Treatments were applied where needed.

Trading

East Texas

  • In Texas, a light volume of new-crop cotton containing mostly color 31 and 41, leaf 3 and 4, staple 37 and longer, mike 41-51, strength 28-32, and uniformity 80-84 sold for around 94.00 cents per pound, FOB warehouse (compression charges not paid).
  • A moderate volume containing mostly color 31 and 41, leaf 3 and 4, staple 34 and longer, mike 42-52, strength 26-31, uniformity 77-82, and 50 percent extraneous matter sold for around 89.00 cents, same terms as above.
  • A light volume containing mostly color 41 and 42, leaf 4-6, staple 36-39, mike 40-48, strength 28-33, and uniformity 79-83 sold for around 86.50 cents, same terms as above.

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 steady. 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. Hospitalization rates increased and health departments encouraged vaccinations.

In Arizona, recent rainfall was expected to help push yields to three and one-half to four bales per acre. Producers and consultants scouted for insects and some treatments were applied for lygus. Harvesting had begun in Yuma, AZ, and modules accumulated at the gin yard. Ginning was expected to begin next week. Soils firmed in New Mexico and Texas, and fieldwork progressed. Damage assessments were underway following the flooding of some fields from the previous reporting period. 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 steady. 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 temperatures were in the upper 80s to mid-90s. Hot, dry weather prevailed with no rainfall in the forecast. Bolls had begun to open, and defoliation was expected to begin next week. Harvesting was projected to begin in mid-to-late September, and ginning will begin in early 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. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. Vessel availability changed frequently, and shipments were difficult to book.

In the San Joaquin Valley, droughty conditions persisted with daytime temperatures in the upper 80s to mid-90s. Stands made good progress and final irrigation was underway. Insect infestations were light. In Arizona, the crop made good progress. Bolls were setting and the plants were loaded. Defoliation was applied in Yuma, AZ.

Harvesting was expected to begin in September. Recent rainfall that fell in the El Paso, TX vicinity left fields in need of dry, sunny weather. The precipitation caused weeds to grow, but helped control whitefly infestations. Stands around Lubbock, TX advanced under sunny conditions with daytime high temperatures in the low to mid-90s. Boll-setting increased.

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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