Weekly Cotton Market Review – USDA

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

    Spot quotations averaged 846 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 104.86 cents per pound for the week ending Thursday, December 2, 2021.

    The weekly average was down from 113.32 cents last week, but up from 67.56 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 109.14 cents Friday, November 26 to a low of 101.06 cents Thursday, December 2. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended December 2 totaled 39,353 bales.

    This compares to 33,685 reported last week and 52,082 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 389,586 bales compared to 531,144 bales the corresponding week a year ago. The ICE March settlement price ended the week at 103.70 cents, compared to 115.78 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #7 FOR UPLAND COTTON December 2, 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 December 9, 2021, allowing importation of 9,434,076 kilograms (43,330 bales of 480-lbs) of upland cotton.

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    Quota number 7 will be established as of December 9, 2021 and will apply to upland cotton purchased not later than March 8, 2022 and entered into the U.S. not later than June 6, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period August 2021 through October 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 moderate. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were lower. Producers booked a moderate volume of cotton as ICE futures trended lower. Trading of CCC-loan equities was inactive. The COVID-19 Pandemic continues to disrupt labor availability and logistics. Vaccination doses were being distributed.

    Sunny to overcast conditions prevailed across the lower Southeast during the period. Daytime high temperatures were in the upper 50s to low 70s with overnight frost observed in some areas. Light scattered precipitation was received in some locales and weekly rainfall totals measured from trace amounts to around one-quarter of an inch. The mostly favorable weather allowed harvesting and fieldwork to advance at a rapid pace.

    Modules and round bales lined fields and producers shredded stalks. Ginning continued uninterrupted. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released November 29, cotton harvested had reached 85 percent in Alabama and 76 percent in Georgia.

    Sunny to overcast conditions were observed across the upper Southeast region during the period. Daytime high temperatures varied from the mid-50s to upper 60s with overnight lows dipping below freezing. Mostly ideal weather allowed harvesting and field activities to advance at a rapid pace. Early morning showers late week delayed fieldwork in some areas.

    Backlogs of modules accumulated on gin yards and ginning continued without interruption. According to NASS, cotton harvested reached 89 percent in North Carolina, 86 in Virginia, and 80 percent in South Carolina.

    Textile Mill

    Domestic mill buyers inquired for a moderate volume of color 41, leaf 4, and staple 34 and longer for April through October 2022 delivery. Domestic mill buyers also made initial inquiries for 2022-crop cotton, color 41, leaf 4, and staple 34 and longer for fourth quarter 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 in Japan inquired for a moderate volume of USDA Green Card Class, color 31, leaf 3, and staple 36 for February through May shipment. Pakistani and Taiwanese mill buyers inquired for a moderate volume of USDA Green Card Class, color 31 and 41, leaf 3 and 4, and staple 35 and longer for January through March shipment. Peruvian mill buyers inquired for a moderate volume of USDA Green Card Class, color 42, leaf 4, and staple 35 for nearby shipment.

    Trading

    • Even-running lots containing color 41, leaf 3-5, staple mostly 37 and longer, mike 43-49, strength 30-32, and uniformity 80-83 sold for around 114.00 cents per pound, 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 29-31, and uniformity 81-83 sold for around 400 points on ICE March futures, same terms as above.
    • A moderate volume of color 41 and 51, leaf 3 and 4, staple 36-38, mike 37-49, strength 28-30, and uniformity 80-82 sold for 175 to 200 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.

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    Vaccinations and booster shots for those previously inoculated are strongly recommended by national health experts to help mitigate the effects of the COVID-19 virus and its many variants.

    Climatic conditions during the week featured variable temperatures, including warmer than average daytime highs. High temperatures were in the 50s and 60s. Overnight lows were in the 20s to 50s. Clear skies prevailed throughout the period. Field activities, including stalk-shredding and fall fieldwork, advanced at a steady pace. Harvesting was rapidly drawing to a conclusion in all areas.

    Ginning continued to make good progress throughout the region. A number of gins throughout the region have completed annual operations. Local experts report yields of 1,200 to 1,300 pounds. Some producers reported lower than expected grades, due in part to excessive rain on open bolls during the harvest season. According to the National Agricultural Statistics Service’s Crop Progress report released on November 29, harvesting had reached 99 percent in Arkansas, 97 in Missouri, and 93 percent in Tennessee.

    South Delta

    Spot cotton trading was inactive. Supplies of available cotton were light. Demand was good. Average local spot prices were lower. 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 and booster shots for those previously inoculated are strongly recommended by national health experts to help mitigate the effects of the COVID-19 virus and its many variants.

    Mostly clear and warm weather conditions prevailed for most of the period. High temperatures were in the 60s and 70s. Overnight lows were in the 30s to 50s. Producers were able to make good progress with field activities, including stalk-shredding and field preparation. Ginning also advanced at a steady pace throughout the territory. More than half of the gins in Louisiana have completed annual pressing operations, and the rest were rapidly winding down, although several gins could run until after the first of the year.

    A number of gins in Mississippi have also finished annual operations. Local experts report yields of 900 to 1,300 pounds. According to the National Agricultural Statistics Service’s Crop Progress report released on November 29, harvesting was completed in Louisiana and had reached 96 percent in Mississippi.

    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 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 moderate. 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 was finishing in the Upper Coast and in the Coastal Bend. Daytime temperature highs were in the low 60s to low 80s. Some areas received up to 3 inches of beneficial rainfall early in the reporting period. Ginning continued in the Winter Garden area. In the Blackland Prairies, producers plowed fields and applied fertilizer. Ginning neared the end.

    In Kansas, harvesting advanced quickly under sunny conditions and many producers were finished. Harvesting was estimated at 75 to 90 percent completed depending on location. Modules were staged near roadways to be transported to gin yards. Transporting of modules out of the fields will soon come to an end. In Oklahoma, a hard freeze helped defoliation and harvesting was expected to be complete within two weeks. Harvesting is about 80 percent done in southwestern Oklahoma.

    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 moderate. 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.

    A storm brought up to one and one-quarter inches of rainfall early in the period. Soils quickly absorbed the precipitation and fieldwork resumed under sunny conditions. Daytime highs were in the low 60s to mid-70s, with overnight lows in the upper 20s to upper 40s. Most fields had been harvested. The gin yards were loaded with modules. Some gins added a second shift if there were enough employees.

    Trading

    East Texas

    • In Texas, lots containing a heavy volume of color 43 and better, leaf 5 and better, staple 36 and longer, mike 39-49, strength 27-30, uniformity 79-82, and 25 percent extraneous matter sold for 100.00 to 108.50 cents per pound, FOB warehouse (compression charges not paid).
    • In Kansas, lots containing a moderate volume of color 21 to 41, leaf 4 and better, staple 35 and longer, mike 36-48, strength 28-35, uniformity 79-82, and 25 percent extraneous matter sold for 103.00 to 110.50 cents, FOB car/truck (compression charges not paid).
    • In Oklahoma, a heavy volume of mixed lots containing color 43 and better, leaf 2-5, staple 36 and longer, mike 27-45, strength 29-35, uniformity 78-83, and 25 percent extraneous matter sold for 103.25 to 104.00 cents, same terms as above.

    West Texas

    • A heavy volume of lots containing color 12 and better, leaf 3 and better, staple 35 and longer, mike 35-45, strength 27-33, and uniformity 77-82 sold for 110.00 to 111.00 cents per pound, FOB car/truck (compression charges not paid).
    • A heavy volume of lots containing color 11 and 21, leaf 3 and better, staple 34 and longer, mike 32-43, strength 27-31, and uniformity 76-81, sold for 105.50 to 109.50 cents, same terms as above.
    • Lots containing a heavy volume of color 31 and better, leaf 4 and better, staple 34 and longer, mike 26-49, strength 27-32, and uniformity 77-82 sold for 97.50 to 105.00 cents, same terms as above.

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was slow. Supplies were moderate. 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 pent-up consumer demand.

    High-pressure off the coast of California kept Arizona temperatures above average for most of November. Central Arizona mashed temperature records that stood since 1949. AccuWeather reported on 25 days in November, central Arizona temperatures were over 80+ degrees, the most ever recorded. Record high temperatures were also reported in parts of New Mexico and El Paso, TX.

    The La Nina weather pattern kept rain and snow from entering most of the region. The El Paso, TX area received approximately one-quarter of an inch early in the period. Harvesting and ginning continued. Arizona quality factors showed the season-to-date predominate color grade was 11/22 and predominate leaf grade 2, according to the Cotton Market News Weekly Cotton Quality reports for week ending December 2. Mike averaged 4.61, staple length averaged 37.25, strength 31.73, and uniformity averaged 81.22.

    Visit the My Market News portal to view the latest daily, weekly, and season-to-date quality reports.

    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 pent-up consumer demand.

    A high-pressure system off the coast of California continues to keep the region rain and snow free as well as keeping temperatures above average for this time of year. Temperatures were in the low to mid-70s. Ginning continued. One southern California gin just started in the period, which is about one week later than normal. Producers had a hard time completely defoliating their fields.

    Fieldwork was active in the SJV as producers shredded stalks in compliance with the California Pink bollworm program. According to the Cotton Market News Weekly Cotton Quality reports for the week ending December 2, showed California Upland season-to-date classing’s as predominate color grade 21 and better was at 72.7 percent, leaf 2 and better at 76.2 percent, mike averaging 4.51, staple 37.64, strength 34.14, and uniformity averaging 82.04. Visit the My Market News portal to view the latest daily, weekly, and season-to-date quality reports.

    American Pima (AP)

    Spot cotton trading was inactive. Supplies of 2021-crop were moderate and producer offerings were light. Demand was very good. Average local prices were steady. No forward contracting or domestic mill activity 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 pent-up consumer demand. According to the Foreign Agricultural Service, U.S. Export Sales report 351,200 bales of Pima cotton were committed for the week ending November 25. This compares to 487,000 bales the previous year and 3,100 bales of 2022-crop were committed for 2022 marketing year.

    Temperatures were in the 70s to low 90s in the Far West. A high-pressure system off the coast of California continues to keep the region rain and snow free. Harvesting and ginning was steady. American Pima quality is excellent.

    For the season ending December 2, American Pima quality showed color grade 1 was the predominate color grade, and leaf grade 1 was the predominate leaf grade. Mike averaged 4.17, staple length 49.21, strength 44.63, and uniformity averaged 86.63, according to Cotton Market News. Visit the My Market News portal to view the latest daily, weekly, and season-to-date quality reports.

    Trading

    Desert Southwest

    • A moderate volume of color 21 and better, leaf 2 and better, staple 37 and longer, mike 35-49, strength averaging 32.5, and uniformity averaging 81.0 was sold for even to 75 points on ICE March futures, uncompressed FOB warehouse.
    • Similar lots containing mike 27-29 sold for around 900 points off ICE March futures, same terms as above.

    San Joaquin Valley

    • No trading activity was reported.

    American Pima

    • No trading activity was reported.



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