Weekly Cotton Market Review – USDA

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    Spot quotations averaged 418 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 139.18 cents per pound for the week ending Thursday, June 16, 2022.

    The weekly average was up from 135.00 cents last week and from 81.29 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 140.66 cents Monday, June 13 to a low of 138.18 cents Wednesday, June 15. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended June 16 totaled 1,428 bales.

    This compares to 221 reported last week and 10,122 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,619,243 bales compared to 1,374,421 bales the corresponding week a year ago. The ICE July settlement price ended the week at 143.53 cents, compared to 146.51 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #9 FOR UPLAND COTTON June 16, 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 June 23, 2022, allowing importation of 11,099,187 kilograms (50,978 bales of 480-lbs) of upland cotton.

    Quota number 9 will be established as of June 23, 2022 and will apply to upland cotton purchased not later than September 20, 2022 and entered into the U.S. not later than December 19, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period February 2022 through April 2022, 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 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, but cities and locales were easing COVID restrictions.

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    Hot and humid conditions prevailed across the lower Southeast with partly cloudy skies observed across the region. Daytime high temperatures were in the mid-to-upper 90s. Heat advisories were issued in many areas. Isolated thunderstorm activity brought moisture to south Alabama, the Florida Panhandle, and south Georgia during the period. Weekly accumulated precipitation totals measured from 1 to 4 inches, with heavier downpours observed in some locales.

    The moisture helped relieve young heat stressed plants. Sowing activity was slowed in Alabama due to soft soils. In Georgia, irrigation schedules were maintained in areas that missed significant precipitation. Planting neared completion, seedlings were emerging, and good stands were reported in most areas. Squaring was underway in older fields. Pressure from cotton pests and weeds were building and producers made herbicide and pesticide applications.

    According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released June 13, planting advanced to 95 percent in Alabama and 92 percent in Georgia; cotton squaring was reported at 15 percent in Georgia and 7 percent in Alabama.

    Partly cloudy weather was observed across the upper Southeast during the period. Seasonably hot and humid conditions prevailed with daytime high temperatures in the upper 90s to low 100s. Isolated thunderstorms brought light to moderate precipitation to the eastern Carolinas and Virginia during the week. Weekly accumulated rainfall totals measured 1 to 2 inches with heavier accumulations observed in some areas.

    The moisture improved droughty conditions along the coastal plain of the Carolinas. Planting neared completion, but advanced at a slower pace due to wet conditions. Seedlings were emerging, good stands were reported in most areas, and squaring was underway. According to NASS, planting advanced to 96 percent in South Carolina, 95 in Virginia, and 92 percent in North Carolina; squaring advanced to 18 percent in Virginia, 7 in North Carolina, and 3 percent in South Carolina.

    Textile Mill

    Demand was good for 2022-crop cotton, color 41, leaf 4, and staple 34 and 35 for fourth quarter 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. Agents throughout the Far East inquired for any discounted styles of cotton.

    Trading

    • No trading activity was reported.

    Southeastern Markets Regional Summary

    North Delta

    Spot cotton trading was inactive. Supplies of available cotton were light. Demand was very light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 virus continues to cause major disruptions to our society in general, as well as international marketing channels, domestic supply chains, and the labor force overall.

    Hot and dry conditions prevailed during the report period. Most cotton producing areas received little to no rainfall. Daytime temperatures were in the mid-to-high 90s. The heat index soared to 110 degrees in the Memphis area. Low temperatures were in the upper 70s. Late-planted fields showed signs of heat stress; dryland fields needed moisture for good crop development.

    According to the National Agricultural Statistics Service’s (NASS) Crop Progress report, released on June 13, cotton squaring advanced to 10 percent complete in Arkansas, 4 in Missouri, and 14 percent in Tennessee. Arkansas was about two weeks behind the five-year average; Missouri and Tennessee were both less than one week behind the five-year average.

    NASS also reported that the crop condition in Arkansas was mostly good to excellent, good in Missouri, and fair to good in Tennessee. Insect pressure was light and easily controlled. Virtual and in-person industry meetings were being planned and attended.

    South Delta

    Spot cotton trading was inactive. Supplies of available cotton were light. Demand was very light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. A light volume of forward contracting was reported. The Covid-19 virus continues to cause major disruptions to our society in general, as well as international supply chains and the worldwide labor force.

    Hot, humid, and dry conditions prevailed during the report period. Most cotton producing areas needed rainfall to promote normal crop development. Producers were irrigating at full capacity. Daytime temperatures were in the mid-to-high 90s. The heat index soared to 115 degrees throughout the region. Low temperatures were in the upper 70s. Local experts in Louisiana reported that the crop made good progress under less than ideal conditions. Squaring advanced rapidly in Louisiana.

    According to the National Agricultural Statistics Service’s (NAAS) Crop Progress report released on June 13, cotton squaring in Louisiana was at 38 percent and 7 percent in Mississippi. The figure for Louisiana was 11 points above the five-year average; Mississippi was slightly above the five-year average. NASS also reported that the crop condition in Louisiana was mostly good while Mississippi was mostly fair to good. Insect pressure was light and easily controlled. Virtual and in-person industry meetings were being planned and attended.

    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 inactive. Supplies and producer offerings were light. Demand was very light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light. Interest was best from China, Korea, and Vietnam.

    Cotton was at peak bloom in the Rio Grande Valley with daytime highs in the 90s. Some stands had good boll loads. Stands progressed in the Coastal Bend and in the Upper Coast under sunny conditions. Heat units increased and more rain is needed to help ease stress. Adjusters evaluated fields in the Upper Coast for insurance claims. Recent rainfall helped stands progress in the northern Blackland Prairies. Insecticide and herbicide were applied to help the crop advance.

    In Kansas, stands advanced under hot, windy conditions with daytime highs in the low 90s to low 100s. Replanted cotton advanced and surpassed the earlier planted stands at most locations. Producers were encouraged. In Oklahoma, sunny and hot conditions prevailed with daytime highs in the low 90s to high 100s. Planting was 62 percent completed, according to the National Agricultural Statistics Service’s Crop Progress report released on June 13. Droughty conditions continued and rainfall would be welcomed.

    West Texas

    Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was very light. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light. Interest was best from China, Korea, and Vietnam.

    Plentiful sunshine and wind dominated the weather pattern with daytime high temperatures in the upper 90s to upper 100s. Progress varied from recently replanted cotyledons to match head square. Some stands advanced, but most have had a rough start. Stand counts were not desirable and decisions were made by adjusters which fields would be failed. West Texas needs rainfall.

    Weed pressure increased with recent thunderstorms. Thrip thresholds were low, but some treatments were applied. Producers and industry experts continued to monitor stands for yield robbing insects. Meetings were held and were well attended.

    Trading

    East Texas

    • In Oklahoma, a light volume of color 31 and 41, leaf 2 and 3, staple 35, mike averaging 42.4, strength averaging 29.5, and uniformity averaging 80.0 sold for around 126.25 cents per pound, FOB car/truck (compression charges not paid).

    West Texas

    • A lot containing a light volume of color 21, leaf 3 and better, staple 36 and longer, mike averaging 36.6, strength averaging 33.6, and uniformity averaging 81.8 sold for around 133.00 cents per pound, FOB car/truck (compression charges not paid).

    Western Markets Regional Summary

    Desert Southwest (DSW)

    Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. The U.S. continues in COVID-19 Pandemic status.

    Excessive heat warnings were in effect as temperatures topped the mid-110s in central Arizona. Level 1 heat stress was noted early in the reporting period. Blooming was reported in Yuma. No insect pressures were reported. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on June 13, cotton squaring was at 38 percent, near the five-year average of 39 percent for Arizona. Boll-setting was at 3 percent, compared to the five-year average of 6 percent.

    Excerpted from the NASS New Mexico Crop Progress report: In Dona Ana County, reports noted that acreage not already planted to alfalfa or pecans was planted to cotton due to the higher drought tolerance of the crop. Additionally, the irrigation allotment from Elephant Butte Dam was 5 inches for the season, forcing growers with any remaining water needs to pump from ground wells, if available.

    Cotton emergence was reported at 50 percent compared to the five-year average of 70 percent. Local sources reported struggles in getting cotton to a good stand. Overall, the DSW crop made good progress.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. The U.S. continues in COVID-19 Pandemic status.

    Hot and dry conditions continued. Temperatures were mostly in the high 90s. Fieldwork was active with crop irrigations. Initial blooming began. The crop made good progress. According to the National Agricultural Statistics Service’s Crop Progress report released on June 13, 10 percent of the crop was squaring compared to the five-year average of 16 percent.

    American Pima (AP)

    Spot cotton trading was inactive. Supplies were light. Demand was good. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. The U.S. continues in COVID-19 Pandemic status.

    Daytime high temperatures were recorded in the high 90s to mid-110s throughout the Far West. Field activities included irrigating, monitoring for pests, and for Fusarium Race 4. Initial blooming began. Overall, the crop made good progress.

    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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