Weekly Cotton Market Review – USDA

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    Spot quotations averaged 146 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 112.18 cents per pound for the week ending Thursday, January 13, 2022.

    The weekly average was up from 111.39 cents last week and from 76.52 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 111.83 cents Friday, January 7 to a high of 114.32 cents Wednesday, January 12.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended January 13 totaled 93,669 bales. This compares to 106,372 reported last week and 79,659 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 948,840 bales compared to 1,060,490 bales the corresponding week a year ago. The ICE March settlement price ended the week at 116.84 cents, compared to 114.72 cents last week.

    SUPPLY AND DEMAND

    The following information was excerpted from the World Agricultural Supply and Demand Estimates, released on January 12, 2022.

    U.S. 2021/22 cotton ending stocks are projected lower this month with lower production and a slight increase in domestic consumption more than offsetting lower exports. Production is 660,000 bales lower at 17.6 million bales—largely due to revised Texas WASDE-620-5 yields—and U.S. mill use is 50,000 bales higher, at 2.55 million bales, based on faster than expected gains through November.

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    Exports are reduced with a lower U.S. crop, continuing logistical issues in the United States and elsewhere, and a decline in projected world trade. Exports are reduced 500,000 bales to 15.0 million, and 2021/22 ending stocks are 200,000 bales lower relative to last month, at 3.2 million bales or 18 percent of use. The projected upland season-average price received by U.S. farmers is unchanged this month, at 90 cents per pound.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #13 FOR UPLAND COTTON January 13, 2022

    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 January 20, 2022, allowing importation of 9,559,147 kilograms (43,904 bales of 480-lbs) of upland cotton.

    Quota number 12 will be established as of January 20, 2022 and will apply to upland cotton purchased not later than April 19, 2022 and entered into the U.S. not later than July 18, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period September 2021 through November 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 were moderate. Demand was good. Producer offerings were moderate. Average local spot prices were higher. Trading of CCC-loan equities was inactive. The COVID-19 Pandemic continues to disrupt labor availability and logistics. Vaccination doses were being distributed.

    Cloudy and overcast conditions over the weekend gave way to sunny and fair skies later in the period across the lower southeast. Daytime high temperatures were mostly in the mid-50s to low 60s. Widespread showers brought one to two inches of moisture to areas throughout Alabama, the Florida Panhandle, and Georgia.

    Harvesting and outside activities remained limited as fields remained too soft to support equipment. Producers would welcome a period of sunny weather to allow soggy fields to dry and wrap-up fieldwork. Gins continued to process backlogs of modules. Producers, ginners, and industry members attended the Southern Southeastern annual meeting.

    A mix of sun and clouds was observed across the upper southeast during the period. Daytime high temperatures were mostly in the upper 40s to upper 50s. Very light precipitation was received in most areas with isolated storms bringing one to two inches of moisture to portions of the Carolinas and Virginia. Outside activities were limited and remained delayed due to wet conditions.

    Some gins remained on gin days as they waited for backlogs of modules to accumulate on gin yards. Producers, ginners, and industry members attended the Southern Southeastern annual meeting.

    Textile Mill

    Domestic mill buyers inquired for a moderate volume 2022-crop cotton, color 41, leaf 4, and staple 34 and longer for delivery in the fourth quarter of 2022. No sales were reported. Yarn demand remained good and mills continued to operate at capacity, or as allowed by labor availability. Mills continued to produce personal protective equipment for frontline workers and consumers. Demand through export channels was good. Demand was good throughout the Far East for any discounted styles of cotton. No sales were reported.

    Trading

    • A moderate volume of color mostly 21 and 31, leaf 2-4, staple mostly 37 and 38, mike 37-49, strength 29-32, and uniformity 81-83 sold for around 121 cents per pound, FOB car/truck (Rule 5, compression charges paid).
    • Similar lots containing color mostly 36 and 37 sold for around 119.25 cents, 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 higher. Trading of CCC-loan equities was inactive. No forward contracting was reported, although some merchants received price discovery inquiries from producers. Cotton was being delivered to fulfill contracts. The Omicron variant of the Covid-19 virus continues to cause major disruptions to our society in general, as well as international marketing channels, supply chains, and the worldwide labor force.

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    Typical winter weather conditions prevailed during the report period. The daytime high temperatures ranged from 40s to 60s. Overnight lows remained in the 20s and 30s. Nearly two inches of precipitation, in the form of rain and sleet, was reported in the Memphis territory, with slightly higher amounts reported in northern areas. Ginning was practically completed throughout the region; a few gins were operating on gin days to wind up their seasons. The Memphis Classing office had reached the 90 percent completion mark as of Wednesday, January 12.

    Virtual and in-person industry meetings were being planned and attended for 2022. According to the U.S. Drought Monitor, recent rainfall ended abnormal dryness across central Arkansas and all of Tennessee; drought conditions persisted in the southern part of Arkansas. Producers monitored commodity prices and the cost of inputs as they continued to plan for the spring planting season.

    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 slow. No forward contracting was reported, although some merchants received price discovery inquiries from producers. Cotton was being delivered to fulfill contracts. The Omicron variant of the Covid-19 virus continues to cause major disruptions to our society in general, as well as international marketing channels, supply chains, and the worldwide labor force.

    Unseasonably warm weather conditions early in the week changed as a cold front moved through the region. High temperatures ranged from 50s to 70s. Overnight lows were in the 20s to 40s. A storm front brought over one inch of rain to most of the region. No fieldwork was reported. Virtual and in-person industry meetings were planned and attended.

    According to the U.S. Drought Monitor, severely deficient soil moisture persisted throughout the state of Louisiana, with the cotton-producing northeastern region experiencing extreme drought conditions. Abnormally dry to moderate drought conditions were prevalent throughout Mississippi.

    Producers monitored the price of commodities; some placed orders for the inputs needed for the upcoming spring planting. Many producers have already locked-in prices for fuel, seed, and fertilizer.

    Trading

    North Delta

    • A light volume of 2020-crop cotton forfeited to the CCC Loan for 27.55 cents per pound.

    South Delta

    • A light volume of mostly color 51 and better, leaf 5 and better, staple 34 and longer, mike 46-52, strength 29-32, and uniformity 79-83 traded for around 250 points off ICE March 2022 Futures, FOB/car truck (Rule 5, compression charges paid).
    • A light volume of CCC-loan equities traded for around 61.50 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 light. Trading of CCC-loan equities was active. Foreign mill inquiries were moderate. Interest was best from Indonesia, Pakistan, and Taiwan. The COVID-19 Pandemic continued to place pressure on shipping logistics and slowed global economic recovery. New case surges were reported in the three-state region.

    In south Texas, beneficial rainfall was received early in the period with daytime temperatures in the low 50s to mid-70s and overnight temperatures in the 40s to 60s. Ginning neared completion in the Upper Coast. Producers booked planting seed. Ginning neared completion in the Blackland Prairies, and some areas received rainfall.

    In Kansas, ginning made good progress with daytime temperature highs in the low 30s to low 60s and overnight lows in the teens to low 30s. Ginning was estimated around 70 percent completed. The high-quality crop was ginning consistently and moving through the equipment with ease. Final modules were hauled to the gin yards. Producers began to book planting seed and fertilizer.

    In Oklahoma, some gins finished pressing bales. Fertilizer and chemicals were booked for the 2022-season. Some gins throughout the region reinstated protocols limiting visitors, meeting outside, and requiring social distancing because of the rise in Omicron variant Covid-19 cases in their communities.

    West Texas

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

    In Texas, less than one-quarter of an inch of rain was received, with daytime temperatures in the mid-40s to mid-70s, and overnight lows were in the 20s to 40s. Rainfall is needed to improve droughty conditions. Fields were prepped for the 2022 planting season. Cover crops were planted, soils were plowed, and stalks were tilled.

    Some gins finished and others were nearly finished in the Northern High Plains, but ginning continued at a steady pace in the Southern High Plains and in the Rolling Plains. Some modules remained in the fields and were staged for pick up by the module truck drivers. Meetings were attended in person and virtually.

    Trading

    East Texas

    • In Texas, lots containing a moderate volume of color 41 to 52, leaf 3 to 7, staple 36 and 37, mike 34-48, strength 27-31, uniformity 78-82, and 50 percent extraneous matter sold for 102.50 to 103.75 cents per pound, FOB warehouse (compression charges not paid).
    • In Kansas, mixed lots containing a moderate volume of color 31 to 32, leaf 8 and better, staple 34 and longer, mike 32-51, strength 28-34, and uniformity 78-82 sold for 100.00 to 106.75 cents, FOB car/truck (compression charges not paid).
    • In Oklahoma, mixed lots containing a heavy volume of color 43 and better, leaf 6 and better, staple 34 to 38, mike 33-47, strength 26-36, and uniformity 77-82 sold for 103.00 to 105.00 cents, same terms as above.
    • A heavy volume of CCC-loan equities traded for 52.50 to 55.00 cents.

    West Texas

    • A heavy volume of lots containing color 11 and 21, leaf 1 and 2, staple 36 and 37, mike 35-45, strength 28-34, and uniformity 77-81 sold for 112.25 to 115.00 cents per pound, FOB car/truck (compression charges not paid).
    • A heavy volume of multiple lots containing color 31 and better, leaf 4 and better, staple 34 and longer, mike 28-50, strength 27-33, uniformity 77-82, and 25 percent extraneous matter sold for 109.00 to 111.25 cents, same terms as above.
    • Lots containing a heavy volume of color 31 and better, leaf 4 and better, staple 31 and 32, mike 25-49, strength 24-32, and uniformity 77-81 sold for 100.50 to 102.75 cents, same terms as above.
    • A light volume of CCC-loan equities traded for around 57.75 cents.

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was slow. Supplies were moderate. Demand was light. Producers continued to deliver bales to fulfill contracts. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. The COVID-19 Pandemic with the Omicron variant continues to disrupt labor availability, shipping, and supply chains.

    Temperatures were in the low 70s for central Arizona. Overnight lows were mostly in the 40s to 50s. No rainfall was recorded in the period. Ginning continued in Arizona. In New Mexico and El Paso, Texas daytime temperatures were mostly in the 50s and 60s. No rainfall was recorded in the period. Ginning neared completion with some gin operating on gin days. Drought conditions and water availability are concerns for the region’s 2022-crop plantings. Sources reported plantings could be the same as last season or lower.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies and demand were light. Producers delivered previously contracted cotton to merchant and cooperative marketing pools. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. The COVID-19 Pandemic, particularly the Omicron variant, continues to disrupt labor availability, shipping, and supply chains.

    Daytime high temperatures were in the 50s and 60s. Overnight lows were in the high 30s to low 40s. No rainfall was recorded in the period. January continues to be a dry month. Much more rain and snow are needed to help replenish the reservoir systems, since many remain below capacity. Ginning continued.

    American Pima (AP)

    Spot cotton trading was inactive. Supplies were light. Demand was very good. Average local spot prices were steady. Producers made inquiries for new-crop pricing. No new sales were reported. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. Interest was best from India, Japan, and Thailand. The COVID-19 Pandemic, especially the Omicron variant, continues to disrupt labor availability, shipping, and supply chains.

    Transportation headaches continued as shippers encountered delays in transit times, at transship ports, receiving documents, and struggled to sooth impatient mill customers. According to the Foreign Agricultural Service, U.S. Export Sales report, 379,200 bales of Pima cotton were committed for export for the week ending January 6.

    Daytime high temperatures were in the 50s to 70s for the Far West. Overnight lows were in the 30s to 50s. Conditions remained dry for mid-January. Ginning continued uninterrupted throughout the region. Sources indicated producers intend to plant slightly more AP acreage for 2022, as prices are significantly higher than for upland. American Pima quality is excellent.

    For the season ending January 13, American Pima quality showed color grade 1 was the predominate color grade, and leaf grade 1 was the predominate leaf grade. Mike averaged 4.13, staple length 49.13, strength 44.47, and uniformity averaged 86.56, according to the Cotton Market News Weekly Cotton Quality reports. Visit the My Market News portal to view the latest daily, weekly, and season to date quality reports.

    Trading

    Desert Southwest

    • A light volume of Arizona cotton, color mostly 21, leaf 2, staple 39-41, mike averaging 40.1, strength averaging 33.7, and uniformity averaging 81.4 sold for around 100 points on ICE March futures, uncompressed, FOB warehouse.
    • A light volume mixed lot of New Mexico cotton, color 21 and 31, leaf 3 and better, staple averaging 35.5, mike averaging 39.0, strength averaging 29.3, and uniformity averaging 80.2 sold for around 110.00 cents per pound, FOB car/trucks (compression charges not paid).

    San Joaquin Valley

    • No trading activity was reported.

    American Pima

    • No trading activity was reported.



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