Weekly Cotton Market Review – USDA

Cotton harvest. ©Debra L Ferguson

Spot quotations averaged 951 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 97.22 cents per pound for the week ending Thursday, September 30, 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 87.71 cents last week and from 60.10 cents reported the corresponding period a year ago.

Daily average quotations ranged from a low of 92.85 cents Friday, September 24 to a season high of 102.66 cents Thursday, September 30. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 30 totaled 11,781 bales.

This compares to 9,335 reported last week and 17,490 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 45,888 bales compared to 187,900 bales the corresponding week a year ago. The ICE December settlement price ended the week at 105.80 cents, compared to 92.46 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #24 FOR UPLAND COTTON September 30, 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 October 7, 2021, allowing importation of 11,655,252 kilograms (53,532 bales of 480-lbs) of upland cotton.

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Quota number 24 will be established as of October 7, 2021 and will apply to upland cotton purchased not later than January 4, 2022 and entered into the U.S. not later than April 4, 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 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.

Sunny to partly cloudy conditions were observed across the lower Southeast during the period. Daytime high temperatures were in the upper 70s to mid-80s. Isolated showers brought 1 to 2 inches of weekly accumulated rainfall to portions of the Florida Panhandle and south Alabama. The crop advanced at a good pace and bolls were cracking open. Boll rot continued to be reported in fields that received excessive wet weather in recent weeks. Defoliants were being applied in the most mature fields, and some required a second application.

Harvesting and ginning was just getting underway and expected to gain momentum in the next two weeks. The Macon Classing Office received the first cotton samples of the season. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 27, cotton bolls opening reached 67 percent in Georgia and 51 percent in Alabama.

Mostly sunny weather was observed across the upper Southeast during the week with daytime highs in the 80s. Producers welcomed the sunshine which helped soft soils to firm and bleach out discolored lint from wet weather in recent weeks. Isolated showers brought around one-half of an inch of rainfall to portions of coastal North Carolina and Virginia.

The crop advanced and bolls were cracking open in the most mature fields. Defoliation was expanding and harvesting had begun in the Carolinas and Virginia on a limited basis. According to NASS, cotton bolls opening reached 67 percent in North Carolina, 64 in Virginia, and 54 percent in South Carolina.

Textile Mill

Domestic mill buyers purchased a heavy volume of color 41, leaf 4, and staple 34 and longer for November 2021 through October 2022 delivery. No additional sales were reported. Yarn demand remained good and mills continued to operate at capacity. Reports indicated labor shortages remained a concern, but had eased at some locales. Mills continued to produce personal protective equipment for frontline workers and consumers.

Demand through export channels was very good. Agents for mills in India, Korea, and Turkey inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 36 and 37 for January through November 2022 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 were light. Demand was good. Average local spot prices were higher. Trading of CCC-loan equities was inactive. Producers booked a light volume of 2021-crop cotton for 101.00 cents per pound. 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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Mostly clear skies, with an occasional thundershower, characterized the weather pattern during the week. Less than 1 inch of accumulated precipitation was reported in most areas. High temperatures were mostly in the 80s. Overnight lows were in the 60s. Local experts reported that defoliation gained momentum throughout the territory. Limited harvesting was underway on early-planted fields.

Ginning was not expected to begin until around the first week of October. Producers were optimistic that the crop was catching up after a late start, and that yields would be better than average. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on September 27, cotton bolls opening neared completion at 95 percent in Arkansas, 70 in Missouri, and 40 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 were light. Demand was good. Average local spot prices were higher. Trading of CCC-loan equities was inactive. Producers booked a light volume of 2021-crop cotton for 101.00 cents per pound. 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 continue at a steady rate regionally.

Mostly damp and cloudy conditions persisted during the week. Light, but frequent, thundershowers brought less than 1 inch of accumulated moisture to most areas. All field activities were hindered by the cool, wet weather. Daytime high temperatures were in the 80s. Overnight temperatures were in the 60s. A few fields were defoliated, but the inclement weather discouraged producers from applying harvest aids.

Widespread defoliation was expected to proceed rapidly once weather conditions permitted. Ginning was not expected to get underway until early to mid-October. Producers continued prepping equipment for harvest and were optimistic that the crop was nearing full maturity. There were reports of a shortage of labor in a few places.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on September 27, cotton bolls opening had advanced normally to 95 percent in Louisiana and 73 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

  • Producers booked a light volume of 2021-crop cotton for 101.00 cents per pound.

South Delta

  • Producers booked a light volume of 2021-crop cotton for 101.00 cents per pound.

Southwestern Markets Regional Summary

East Texas

Spot cotton trading was active. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were higher. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was slow. Foreign mill inquiries were light. Interest was best from China, Indonesia, and Turkey.

The COVID-19 Pandemic continued to place pressure on commodity markets, shipping logistics, and slowed global economic recovery. Ports were congested. Pfizer vaccination boosters were underway. Moderna and Johnson & Johnson boosters were expected to be available in the near future.

A rainy period descended upon south Texas and coastal areas; slowing crop progress in some areas late in the period. Ginning and harvesting continued in the Upper Coast and in the Winter Garden area. Harvesting and ginning activities were winding down in the Coastal Bend. Ginning neared the last few weeks in the Rio Grande Valley. Stalks were destroyed and plowed ahead of rain events. In the Blackland Prairies, widespread thunderstorms hindered harvesting activities.

In Kansas and Oklahoma, harvest aids were applied, and industry members expected above average yields. A cold front brought rain, wind, and cooler temperatures late in the reporting period that hindered fieldwork. A few producers were expected to begin harvesting next week. Gins were ready to offer pressing services.

West Texas

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was light. 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. Interest was best from China, Indonesia, and Turkey.

The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. Global economic recovery was slow. Pfizer vaccination boosters were administered. Moderna and Johnson & Johnson boosters were expected to be available in the coming weeks.

Producers were encouraged with the potential for above-average yields with daytime temperatures in the upper 80s to low 90s. A cold front moved into the region late in the period bringing cooler temperatures. Stray showers brought up to one and one-half inches of untimely rainfall as boll openers and defoliant applications had begun. Bolls continued to open. Stripper harvesting began on dryland fields.

Modules began to accumulate at some gins and a few gins were prepared to offer pressing services as soon as October 1. Gin managers were focused on hiring module truck drivers and gin personnel.

Trading

East Texas

  • In Texas, mixed-lots containing a heavy volume of color 12 and better, leaf 4 and better, staple 36 and longer, mike 29-49, strength 28-34, and uniformity 78-83 sold for 99.50 to 1.025 cents per pound, FOB warehouse (compression charges not paid).
  • Lots containing a heavy volume of color 21-41, leaf 2-5, staple 36 and longer, mike 38-51, strength 25-32, and uniformity 78-83 sold for 94.25 to 95.00 cents, same terms as above.
  • A light volume of CCC-loan equities traded for 36.75 cents.

West Texas

  • A mixed-lot containing a light volume of 2020-crop cotton color 33 and better, leaf 3 and better, staple 34 and longer, mike 33-46, strength 26-33, and uniformity 77-82 sold for 89.00 cents per pound, FOB car/truck (compression charges not paid).
  • Mixed-lots containing a moderate volume of 2010 to 2013-crop cotton color 42 and better, leaf 5 and better, staple 34 and longer, mike 33-39, strength 28-33, uniformity 78-83, and 50 percent extraneous matter sold for around 84.00 cents, same terms as above.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies of 2021-crop cotton were light. Demand was moderate. Average local prices were higher. A light volume of forward contracting of 2021-crop was reported, but most growers had already contracted a volume they were comfortable with in late spring/early summer. No domestic mill activity was reported. Foreign mill inquiries were moderate. West Coast port congestion, container and truck availability, as well as pent-up consumer demand continued to affect cotton-shipping logistics. The COVID-19 Pandemic continued.

Climatic conditions were noticeably cooler in Arizona. Daytime high temperatures were in the 80s to 90s. Scattered showers produced around one-tenth to one-third of an inch of moisture in the period. In the Safford Valley, defoliation activities were delayed due to daily moisture. Ginning went smoothly in Yuma. The New Mexico and El Paso, TX fields approached cut-out stage. Producers prepared equipment for harvest. Industry and producers attended annual meetings.

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 demand was light. 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.

Poor air quality was prevalent early in the period. Smokey, hazy conditions continued as wildfires burn in California. Conditions improved later in the week as cooler temperatures and winds entered the region. Fields were defoliated. Initial harvesting began in the period. Modules were trucked to gin yards. Ginning was expected to begin next week.

American Pima (AP)

Spot cotton trading was inactive. Supplies of 2020-crop were light. Demand was very good. Average local prices were steady. A light volume of forward contracting of 2021-crop was reported. No domestic mill activity was reported. Foreign mill inquiries were good. Interest was best for prompt shipment. Concerns remained about shipping cotton in a timely manner as backlogs continued at the West Coast ports, reduced inland transportation availability, and labor shortages. The COVID-19 Pandemic continued.

Cooler temperatures entered the region. Daytime high temperatures were in the 90s to 70s. In the Desert Southwest, daily scattered showers produced around one-tenth to one-third of an inch of moisture. Defoliation activities were delayed. Fields were defoliated in the San Joaquin Valley of California. Bolls were cracking open in the region. Equipment was prepared 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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