Weekly Cotton Market Review – USDA

    Truck backing up to unload cotton module onto gin conveyor belt. ©Debra L Ferguson

    Spot quotations averaged 96 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 113.23 cents per pound for the week ending Thursday, November 18, 2021.

    The weekly average was down from 114.19 cents last week and from 66.10 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 112.20 cents Tuesday, November 16 to a high of 113.99 cents Wednesday, November 17.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 18 totaled 73,511 bales. This compares to 57,398 reported last week and 55,843 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 316,548 bales compared to 395,734 bales the corresponding week a year ago. The ICE March settlement price ended the week at 115.14 cents, compared to 115.41 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #5 FOR UPLAND COTTON November 18, 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 November 25, 2021, allowing importation of 10,024,400 kilograms (46,041 bales of 480- lbs) of upland cotton.

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    Quota number 5 will be established as of November 25, 2021 and will apply to upland cotton purchased not later than February 22, 2022 and entered into the U.S. not later than May 23, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period July 2021 through September 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 light. Supplies and producer offerings were moderate. Demand was good. 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 logistics. Vaccination doses were being distributed.

    Mostly sunny to partly cloudy conditions dominated the weather pattern across the lower Southeast during the period. Seasonably cool daytime temperatures in the 60s warmed into the 70s as the week progressed; areas of Alabama and Georgia reported the first frost of the year over the weekend. Light rainfall was received across north Alabama and north Georgia, precipitation totals measured from trace amounts to around one-half of an inch.

    The mostly favorable weather allowed harvest activities to advance with minimal interruption. Producers remained concerned about quality and yield reduction due to excessive wet weather during the fall. Boll-rot and hard locked bolls continued to be reported in some areas.

    Gins continued to accumulate backlogs of modules on gin yards and gins expanded operating schedules as labor availability allowed. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released November 15, cotton harvested had reached 66 percent in Alabama and 55 percent in Georgia.

    Mostly sunny conditions prevailed across the upper Southeast until scattered showers arrived late in the period. Daytime high temperatures dipped into the mid-60s, but warmed back into the 70s late week. The mostly favorable weather conditions allowed harvesting to advance at a rapid pace. According to NASS, cotton harvested reached 71 percent in North Carolina, 62 in Virginia, and 52 percent in South Carolina.

    Textile Mill

    Domestic mill buyers inquired for a moderate volume of color 42 and better, leaf 5 and better, and staple 32 and longer for April through December 2022 delivery. No sales were reported. Yarn demand remained good and mills continued to operate at capacity as allowed by labor availability. Mills continued to produce personal protective equipment for frontline workers and consumers.

    Demand through export channels was moderate. Agents for mills throughout the Far East inquired for any discounted styles of cotton. No sales were reported.

    Trading

    • A moderate volume even-running lot containing color 31, leaf 2 and 3, staple mostly 38, mike 37-49, strength 30-32, and uniformity 81-83 sold for around 700 points on ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
    • A moderate volume of color 31 and 41, leaf 3 and 4, staple 36-38, mike 43-47, strength 28-30, and uniformity 80-82 sold for around 550 points on ICE March futures, same terms as above.
    • A light volume of color 41 and 42, leaf mostly 2 and 3, staple 37 and 38, mike 43-47, strength 28-31, and uniformity 80-82 sold for around 300 points on ICE March futures, same terms as above.

    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 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, particularly due to high freight costs, demand for deck space, and a shortage of shipping containers and truck drivers. Vaccinations proceeded at a slow pace, including booster shots for those previously inoculated.

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    Climatic conditions during the week featured warm temperatures early in the week, which dropped sharply as another cold front moved through the region. Mostly clear skies prevailed until late week; a cold front brought unnecessary precipitation and dropped temperatures about 20 degrees. Accumulated moisture of up to 1 inch was reported in many places. High temperatures were in the 50s to 70s.

    Overnight lows were in the 30s to 50s. Field activities, including harvesting, stalk-shredding, and fall fieldwork, made good progress until halted by showers. Ginning advanced steadily throughout the region. Local experts report yields of 1,000 to 1,500 pounds. According to the National Agricultural Statistics Service’s Crop Progress report released on November 15, harvesting had reached 94 percent in Arkansas, 86 in Missouri, and 72 percent in Tennessee.

    South Delta

    Spot cotton trading was slow. Supplies of available cotton were very light. Demand was good. 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, particularly due to high freight costs, strong demand for cargo space, and a shortage of shipping containers, dock workers, and truck drivers. Vaccinations continue at a slow rate regionally, including booster shots for those previously inoculated.

    The weather pattern during the week featured warmer temperatures early in the week, which dropped sharply as another cold front moved through the region. High temperatures were in the 60s to 80s. Overnight lows were in the 30s to 50s. Mostly clear skies prevailed until late week when rain showers returned to a few unharvested areas. A few places experienced heavy morning fog, which delayed harvest until early afternoon in some fields.

    Field activities, including stalk-shredding and field preparation, progressed steadily in advance of inclement weather. Ginning also progressed at a steady pace throughout the territory. Several gins have completed annual pressing operations, and most gins in Louisiana expect to finish by or before Thanksgiving. Local experts report yields of 900 to 1,100 pounds.

    According to the National Agricultural Statistics Service’s Crop Progress report released on November 15, harvesting had advanced to 93 percent in Louisiana and 83 percent in Mississippi.

    Trading

    North Delta

    • No trading activity was reported.

    South Delta

    • A moderate volume of color 41 and better, leaf 4 and better, staple 37 and longer, mike 35-49, and uniformity 79-83 traded for around 175 points on March ICE futures, FOB car/truck (Rule 5, compression charges paid).

    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 lower. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign mill inquiries were heavy. Interest was best from China, Pakistan, and Turkey. The COVID-19 Pandemic continued to place pressure on shipping logistics and slowed global economic recovery.

    Ginning continued in the Upper Coast and in the Winter Garden area. Most harvesting had been completed in the Coastal Bend. South Texas ginning is running later than normal at some locations and expected to be completed mid-December to mid-January. Beneficial rainfall in south Texas and the Rio Grande Valley brought needed precipitation to the area.

    The Blackland Prairies received rainfall early in the reporting period that will benefit winter crops and help build subsoil moisture levels. Some gins had finished for the season. Stalks were shredded and fields were prepared for winter.

    Kansas harvested was 30 percent completed, near the 33 percent five-year average, and Oklahoma was 60 percent harvested ahead of the 51 percent five-year average, according to the National Agricultural Statistics Service’s Crop Progress report released on November 15. Cotton condition was mostly fair to good in both states.

    West Texas

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

    Harvesting continued after sundown on the High Plains under mostly clear skies and windy conditions. Daytime highs were in the low 50s to mid-80s, with overnight lows in the upper 20s to upper 50s. Record setting daytime highs in the 80s were reached before a cold front entered the region. Harvesting expanded in the Rolling Plains and in the Edwards Plateau. Many locations experienced their first freeze, which will help remaining leaves fall from the plants.

    Approximately 50 percent of the stands had been harvested in the High Plains according to local experts. Yields were better than expected, and producers were encouraged. Modules in the fields were trucked to the gin yards. Gins continued processing bales at capacity. Fertilizer prices experienced significant increases and producers considered how to manage within operational budgets.

    Stalks were shredded at some locations and fields were prepared for winter weather and hopefully rainfall. The Abilene Classing Office graded more than 250,000 cotton samples for producers in Kansas, Oklahoma, and Texas.

    Trading

    East Texas

    • In Texas, lots containing a heavy volume of color 31-52, leaf 3-5, staple 36 and longer, mike 37-52, strength 24-36, uniformity 78-84, and 75 percent extraneous matter sold for 105.00 to 107.50 cents per pound, FOB warehouse (compression charges not paid).
    • In Kansas, lots containing a heavy volume of color 33 and better, leaf 2-7, staple 33 and longer, mike 32-43, strength 25-33, uniformity 77-81, and 75 percent extraneous matter sold for 107.50 to 108.50 cents, same terms as above.
    • In Oklahoma, a heavy volume of lots containing color 13 and better, leaf 4 and better, staple 33 and longer, mike 37-46, strength 27-34, uniformity 77-82, and 25 percent extraneous matter sold for 109.75 to 112.25 cents, FOB car/truck (compression charges not paid).

    West Texas

    • A heavy volume of lots containing mostly color 11 and 21, leaf 3 and better, staple 35 and longer, mike 35-43, strength 29-34, and uniformity 77-83 sold for 115.25 to 117.75 cents per pound, FOB car/truck (compression charges not paid).
    • A heavy volume of lots containing color 22 and better, leaf 4 and better, staple 34 and longer, mike 38-48, strength 27-34, and uniformity 76-82, sold for 112.25 to 113.50 cents, same terms as above.
    • Lots containing a heavy volume of color 12 and better, leaf 1 and 2, staple 33 and longer, mike 27-49, strength 26-32, and uniformity 77-80 sold for 106.00 to 109.00 cents, same terms as above.

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was slow. Supplies and producer offerings were light. Demand was moderate. Average local prices were lower. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. The COVID-19 Pandemic continued to impact West Coast port congestion, domestic and international supply chains, and consumer demand.

    Mostly sunny conditions prevailed with temperatures in the 80s in Arizona. Temperatures were in the 70s in New Mexico and El Paso, TX. No rainfall was recorded for the DSW. Harvesting and ginning were active. Modules began to accumulate on gin yards. Fieldwork consisted of harvesting, shredding stalks, and preparing fields for winter plantings.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies of 2021-crop cotton were light. Demand was good. Average local prices were lower. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. The COVID-19 Pandemic continued to impact West Coast port congestion, domestic and international supply chains, and consumer demand.

    Foggy days were prevalent in the period; some of the thickest fog conditions in years. Moisture hung heavy in the air throughout the day. No rainfall continues through the next seven days. Ginning is active. Modules accumulated on gin yards. Fieldwork was limited, due to damp soils from the heavy fog. Producers shredded stalks in compliance with the California Pink bollworm program.

    American Pima (AP)

    Spot cotton trading was inactive. Supplies of 2021-crop were increasing, but producer offerings were light. Demand was very good. Average local prices were steady. No forward contracting was reported. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. Foreign mill inquiries were good and for prompt shipment. Shippers managed split shipments, rolled bookings, and variable transportation costs. The COVID-19 Pandemic continued to impact West Coast port congestion, domestic and international supply chains, and consumer demand.

    Temperatures were in the 60s to 80s in the Far West. No rainfall was reported for the region. According to the seven-day forecast, dry conditions will continue. Very little second picking was being done in the San Joaquin Valley (SJV) of California mostly due to the heavy fog delaying access to fields. On the plus side, some SJV producers reported yields were better than anticipated compared to initial early harvesting results.

    Local sources estimated around 30 percent of the crop was ginned. The Supima Harvest Symposium was held virtually. The Symposium focused on farming practices, processing, classing, traceability, and marketing.

    Trading

    Desert Southwest

    • A light volume of mostly color 21, leaf 2 and better, staple 38 and longer, mike 35-49, strength averaging 31.5, and uniformity averaging 80.0 was sold.

    San Joaquin Valley

    • No trading activity was reported.

    American Pima

    • No trading activity was reported.



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