Weekly Cotton Market Review – USDA

Cotton harvest. ©Debra L Ferguson

Spot quotations averaged 63 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 90.71 cents per pound for the week ending Thursday, September 16, 2021.

The weekly average was down from 91.34 cents last week, but up from 59.84 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 91.41 cents Friday, September 10 to a low of 89.59 cents Thursday, September 16.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 16 totaled 7,613 bales. This compares to 3,354 reported last week and 33,704 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 24,772 bales compared to 158,973 bales the corresponding week a year ago. The ICE October settlement price ended the week at 93.41 cents, compared to 94.56 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #22 FOR UPLAND COTTON September 16, 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 23, 2021, allowing importation of 11,655,252 kilograms (53,532 bales of 480- lbs) of upland cotton.

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Quota number 22 will be established as of September 23, 2021 and will apply to upland cotton purchased not later than December 21, 2021 and entered into the U.S. not later than March 21, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period May 2021 through July 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 slow. Supplies and producer offerings were light. Demand was light. Average local spot prices were lower. 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 were in the upper 80s. Widespread shower activity brought rainfall to areas throughout the region. Slow moving Tropical Storm Nicholas deposited the heaviest precipitation accumulations as it brushed along Gulf Coastal areas during the week. Weekly accumulated rainfall totals measured from 3 to 8 inches in south Alabama and the Florida Panhandle and 1 to 2 inches in areas of south Georgia.

Flash flood warnings were issued for south Alabama as rivers and streams surged with rainwater. The crop advanced, but remained a couple of weeks behind normal progress. Fieldwork was limited due to the wet conditions.

Producers continued to scout younger fields as stink bugs remained a threat to immature bolls. Defoliation had begun on a limited basis in older cotton fields. A period of sunny and unseasonably warm weather would be welcome to finish boll development on the top of the crop and bleach out discolored lint. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 13, cotton bolls opening reached 43 percent in Georgia and 27 percent in Alabama.

Mostly sunny weather was observed across the upper Southeast over the weekend with partly cloudy conditions developing later in the week. Daytime high temperatures varied from the mid-80s to low 90s. Isolated stray shower activity brought light precipitation to portions of the eastern Carolinas late in the week. The crop progressed at a good pace. Insect pressure was light; producers continued to scout younger fields for stink bugs. According to NASS, cotton bolls opening reached 37 percent in North Carolina, 36 in South Carolina, and 34 percent in Virginia.

Textile Mill

Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 and longer for January through October 2022 delivery. No sales were reported. Yarn demand remained good, and mills operated at capacity as allowed by available labor. Mills continued to produce personal protective equipment 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 36 for October shipment. Venezuelan mill buyers purchased a moderate volume of color 31, leaf 3, and staple 35 and longer for prompt shipment. Indonesian mill buyers inquired for a moderate volume of color 31, leaf 3, and staple 34 and longer for January through March 2022 shipment. No additional sales were reported.

Trading

  • Even-running lots containing color 31 and 41, leaf 3 and 4, staple 36 and longer, mike 35-49, strength 29-31, and uniformity 80-82 sold for around 87.75 cents per pound, FOB car/truck (Rule 5, compression charges paid).

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 lower. 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 new variants of the COVID-19 virus are of concern nationwide; vaccinations proceeded at a steady pace.

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Climatic conditions varied between clear skies and scattered thundershowers. Around 1 inch of accumulated precipitation was reported in most areas. High temperatures were mostly in the 80s and overnight lows were in the low 70s. The crop made good progress. Local experts reported that defoliation was underway on a few fields and was expected to gain momentum, particularly in southern parts of the region.

Harvesting and ginning were not expected to begin until around the end of the month. Producers prepared harvest equipment. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on September 13, cotton bolls opening advanced normally to 47 percent in Arkansas, 28 in Missouri, and 11 percent in Tennessee. NASS reported that the condition of the majority of the crop in Arkansas was good to excellent, while it was rated fair to good in Missouri and Tennessee.

South Delta

Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy. Variants of the COVID-19 virus are of great concern locally and nationally. Vaccinations continued at a steady rate regionally.

Tropical Depression Nicholas stalled over Louisiana and southern Mississippi, bringing heavy rainfall to a storm-battered region. Up to 12 inches of accumulated precipitation were reported in the hardest hit places. Buildings not yet repaired from the previous storm faced the possibility of even more water damage as residents farther inland braced for up to an additional 4 inches over the next few days.

Daytime high temperatures were in the 80s. Overnight temperatures were in the 70s. Power outages persisted in some rural areas as crews struggled to repair damaged powerlines and poles. Defoliation was underway in some areas, but no harvesting was reported. Ginning was not expected to get underway until near the end of September.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on September 13, cotton bolls opening had advanced to 71 percent in Louisiana and 59 percent in Mississippi. NASS reported that the condition of the majority of the crop in Louisiana and Mississippi was fair to good.

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

Several ports were congested. Hospitalization rates increased and most were at capacity. Vaccination opportunities were offered to the public. An executive order on September 9 requires all federal employees and contractors to be vaccinated. Rules were under development requiring private businesses with more than 100 employees to ensure workers are either vaccinated or tested negative for COVID-19 at least once per week.

Harvesting ran long hours before Hurricane Nicholas bought heavy rainfall and tropical force winds to the Texas Gulf Coast early in the period. Flash flooding in Nueces County was reported as early as Monday, September 13. Cotton producing areas received one and one-half inches to more than fourteen inches of heavy rainfall. Widespread power outages were reported. Harvesting and ginning was at a standstill in the Upper Coast. More than 75 percent of the stands were harvested and in modules in the Rio Grande Valley.

Daytime temperature highs were in the mid-80s to 90s. In the Blackland Prairies, bolls were popping open. Defoliation was applied and picker harvesting was interrupted by rainfall in the southern counties. The northern counties had begun to apply defoliants and if the weather remains cooperative, stripper harvesting will begin in late September.

In Kansas, the crop advanced under sunny conditions. A storm brought around 1 inch of beneficial rainfall. Opened bolls were 38 percent, ahead of 25 percent last year and the 22 percent five-year average, according to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on September 13. In Oklahoma, irrigation was terminated as the crop finished and water supplies were minimal. Opened bolls were 23 percent compared to 34 last year and behind the 35 percent five-year average, according to NASS.

West Texas

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

Major ports experienced vessel congestion. Container shortages were concerning. An executive order on September 9 requires all federal employees and contractors to be vaccinated. Rules that would require private businesses with more than 100 employees to ensure workers are either vaccinated or tested negative for COVID-19 once per week were under development.

Stands advanced with temperature highs in the mid-80s to low 100s. Intermitted showers brought light rain to some areas and smoky skies persisted from the Far West wildfires. Producers were encouraged with cotton progress in the Panhandle. Bolls were popping open. The crop nearly caught up and quality issues were no longer a concern. Some dryland fields suffered from a lack of rainfall in the Rolling Plains.

Dryland stands that received recent showers were expected to yield around one and one-half to two bales per acre. Although the crop advanced, good growing conditions throughout September are needed. Crop experts continued to monitor for late season aphids, bollworms, lygus, and stink bugs. Widespread defoliation was 14 to 21 days away in the Southern Low Plains. The first module of the season was harvested and delivered in Gaines County. It weighed 6,740 pounds and was planted on May 6 and harvested on September 9.

Trading

East Texas

  • In Texas, a heavy volume of lots containing color 21 and 31, leaf 2 and 3, staple 36, mike 40-49, strength 28-33, and uniformity 79-82 sold for around 96.00 cents per pound, FOB warehouse (compression charges not paid).
  • A moderate volume of similar lots containing color 21 and 31, leaf 2 and 3, staple 37-39, mike 40-46, strength 28-32, and uniformity 80-83 sold for around 95.50 cents, same terms as above.
  • Even-running lots containing a heavy volume of color 31 and 41, leaf 3 and 4, staple 35-39, mike 35-48, strength 26-34, and uniformity 78-83 sold for 93.00 to 93.25 cents, same terms as above.
  • A lot containing a moderate volume of color 31 and 41, leaf 3-5, staple 37 and longer, mike 41-48, strength 29-33, uniformity 80-83, and 100 percent extraneous matter (seed coat fragments) sold for around 88.00 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 were light. Demand was moderate. Average local prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill demand was moderate. Interest was best for prompt shipping. West Coast port congestion, container, and truck availability, as well as pent-up demand continued to affect cotton-shipping logistics. The COVID-19 Pandemic continued.

Hot and dry conditions were prevalent in the DSW. No rainfall was recorded in the region. Harvesting continued in Yuma, AZ. Modules were trucked to the gin yard. Ginning is active. Quality results from early pickings were typical for the area. The central Arizona, New Mexico, and El Paso, TX crop advanced to cut-out stage. Some Arizona producers began defoliating in the period. Gins completed final repairs. Producers prepared equipment for harvest.

San Joaquin Valley (SJV)

Spot cotton trading was inactive. Supplies and demand were light. Average local prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill demand was light. Interest was best for prompt shipping. West Coast port congestion, container, and truck availability, as well as pent-up demand continued to affect cotton-shipping logistics. The COVID-19 Pandemic continued.

Early in the reporting period, rolling thunder and lightning entered the Valley from the south. Around one-tenth of an inch of moisture was received. Hazy conditions continued as wildfires burn in California. In Tulare County, the KNP Complex fire threatens a giant Sequoia grove in Sequoia National Park. Bolls were cracking open and defoliation activity increased.

The California Department of Food and Agriculture is conducting a statewide Cotton Seed Bug field survey, which began on September 1. Approximately 10 percent of cotton acreage in each county will be surveyed. The Cotton Seed Bug was first discovered in southern California in 2019. Gins completed their final repairs and preparations for the season. Ginning was expected to begin the second week of October. Producers prepared equipment for harvest.

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 or domestic mill activity was reported. Foreign mill inquiries were moderate. Interest was best for prompt shipment. West Coast port congestion, container, and truck availability, as well as pent-up demand continued to affect cotton-shipping logistics. Concerns remained about shipping new-crop cotton in a timely manner going into the fall. The COVID-19 Pandemic continued.

Hot and dry conditions continued for much of the Far West. No rainfall was recorded for the Desert Southwest, and trace amounts were reported in the San Joaquin Valley (SJV) of California early in the period. Harvesting was active in Yuma, AZ. The crop approached cut-out stage in the Far West. Early-season varieties were defoliated in the SJV. Producers prepared equipment for harvest.

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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