Weekly Cotton Market Review – USDA – AgFax

Spot quotations averaged nearly 11 cents 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 145.01 cents per pound for the week ending Thursday, May 5, 2022.

This is the highest weekly average since week ending June 16, 2011 when the average was 150.43 cents. The weekly average was up from 134.06 cents last week and from 84.03 cents reported the corresponding period a year ago.

Daily average quotations ranged from a low of 140.63 cents Friday, April 29 to a season high of 149.76 cents Wednesday, May 4. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended May 5 totaled 9,603 bales.

This compares to 4,153 reported last week and 2,327 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,611,581 bales compared to 1,351,427 bales the corresponding week a year ago.

The ICE July settlement price ended the week at 148.76 cents, compared to 147.68 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #3 FOR UPLAND COTTON May 5, 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 May 12, 2022, allowing importation of 9,898,391 kilograms (45,462 bales of 480-lbs) of upland cotton.

Quota number 3 will be established as of May 12, 2022 and will apply to upland cotton purchased not later than August 9, 2022 and entered into the U.S. not later than November 7, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period January 2022 through March 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 slow. Supplies and producer offerings were light. Demand was moderate. Producer offerings were light. Average local spot prices were higher. Trading of CCC-loan equities was slow. The COVID-19 Pandemic continues to disrupt labor availability and logistics, but cities and locales were easing COVID restrictions.

Sunny to cloudy conditions prevailed across the lower Southeast during much of the period. Daytime high temperatures were mostly in the 80s and 90s. Widespread showers brought moisture to portions of the region over the weekend and later in the week. Weekly accumulated rainfall totals measured from trace amounts in south Georgia to around 2 inches in areas throughout Alabama and the Florida Panhandle.

Despite the rainfall in some areas and moderate drought in other places, soil moisture conditions allowed planting to advance where soils were firm enough to support equipment. Producers ran planters long hours in between rain events to finish sowing ahead of storms. Seeds were sprouting and seedlings were emerging in the earliest-planted fields.

Fields were irrigated in droughty areas of south Georgia that missed rainfall. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released May 2, planting advanced to 12 percent in Alabama and 11 percent in Georgia.

Partly to mostly cloudy conditions prevailed across the upper Southeast during the period. Daytime high temperatures were mostly in the 80s. Intermittent shower activity brought from trace amounts to around one and one-half inches of moisture to areas of the eastern Carolinas and Virginia. Fieldwork continued without interruption and planting was getting underway.

Some producers were dusting in seed while others were waiting for additional rainfall to fortify subsoil moisture. According to NASS, planting advanced to 17 percent in Virginia, 11 percent in North Carolina, and 6 percent in South Carolina.

Textile Mill

Domestic mill buyers inquired for a moderate volume 2022-crop cotton, color 42 and better, leaf 5 and better, and staple 32 and longer for first quarter 2023 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 good. Mill buyers throughout the Far East inquired for any discounted styles of cotton.

Trading

A heavy volume of color mostly 31 and 41, leaf 3-5, staple 36 and longer, mike 37-49, strength 28-32, and uniformity 80-82 sold for around 152.00 cents per pound, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).

South Central Markets Regional Summary

North Delta

Spot cotton trading was inactive. Supplies of available cotton and demand were 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.

Clear to partly cloudy weather prevailed during most of the week. Less than one-quarter of an inch of rain was reported in most areas. Daytime high temperatures were in the 80s, slightly above seasonal averages. Overnight low temperatures were in the 50s and 60s. According to the U.S. Drought Monitor, drought-stricken areas in southern Arkansas were upgraded to abnormally dry as a result of recent rainfall in that region.

Planting was underway in all areas. Weed control was the top priority as cotton extension specialists advised producers that controlling weed populations this season would require the proper use and timely application of a limited assortment of herbicides. According to the National Agricultural Statistics Service’s Crop Progress report released on May 2, planting advanced to 13 percent complete in Arkansas, 8 in Missouri, and 3 percent in Tennessee. Virtual and in-person industry meetings were being planned and attended.

South Delta

Rain showers brought slightly cooler temperatures and accumulated moisture of over 2 inches in some areas of Louisiana, with lesser amounts in parts of the region. Daytime high temperatures were in the 80s. Overnight low temperatures were in the 60s. According to the U.S. Drought Monitor, extreme drought conditions in areas of northern Louisiana and central Mississippi improved two categories, to moderate.

However, recent rainfall hindered fieldwork in a few places due to muddy fields. Producers made good progress with sowing this season’s crop in most areas. Cotton extension specialists advised producers that the proper use and timely application of available herbicides would be critical to controlling weed populations this season.

According to the National Agricultural Statistics Service’s Crop Progress report released on May 2, planting had reached 35 percent complete in Louisiana and 10 percent in Mississippi. Virtual and in-person industry meetings were being planned and attended.

Trading

North Delta

A light volume of mostly color 41 and better, leaf 4 and better, staple 37 and longer, mike 41-52, strength 28-33, and uniformity 80-84, with 100 percent extraneous matter (plastic) traded for around 87.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).

South Delta

A light volume of mostly color 41 and better, leaf 4 and better, staple 37 and longer, mike 41-52, strength 28-33, and uniformity 80-84, with 100 percent extraneous matter (plastic) sold for around 87.50 cents per pound, FOB car/truck (Rule 5, compression charges paid).

Southwestern Markets Regional Summary

East Texas

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were higher. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light. The COVID-19 Pandemic continued to place pressure on logistics. Global economic recovery was slow.

Cotton was squaring in the Rio Grande Valley with daytime highs in the upper 80s to low 90s. Recent rainfall left fields soggy. According to industry experts, cotton aphid infestations were on the rise. Recent rainfall limited fieldwork in the Coastal Bend and in the Upper Coast. Stands made good progress where rain was received. Stands had begun to establish in the Blackland Prairies. Widespread rainfall brought beneficial precipitation to most cotton fields.

In Kansas, beneficial rainfall was received that left fields muddy and encouraged producers to plant more cotton. Cooler temperatures persisted with daytime highs in the mid-60s after thunderstorms arrived. Planting seed sales were strong. Some dryland wheat fields were abandoned and were expected to go to sorghum or cotton. Planting was expected to begin in about two weeks.

In Oklahoma, fieldwork was delayed, and planting seed was delivered. Planted acreage was expected to be up compared to last season, but abandonment was expected to be higher due to a lack of seasonal rainfall.

West Texas

Spot cotton trading was slow. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was slow. Foreign mill inquiries were light. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. Global economic recovery was slow.

Strong thunderstorms brought more than 4 inches of precipitation to isolated areas in the Rolling Plains with daytime temperature highs in the mid-70s to low 90s. Overnight lows in the low-to-mid 30s kept planting activity from expanding. Trace to light amounts of rainfall were received in the High Plains, but coverage was not widespread. The moisture quickly absorbed into the soil. Winds gusting more than 80 miles per hour caused structural damage for some businesses and residences. Planting seed was delivered and limited sowing had begun.

Trading

East Texas

In Kansas, a lot containing a light volume of color 21 and 31, leaf 2 to 4, staple 36, mike averaging 44.0, strength 31-34, uniformity 79-82, and 75 percent extraneous matter sold for around 144.00 cents per pound, FOB car/truck (compression charges not paid).
In Oklahoma, a heavy volume of color 41 and better, leaf 4 and better, staple 35 to 39, mike 25-44, strength 27-42, and uniformity 77-83 sold for 140.00 to 145.00 cents, same terms as above.

West Texas

A light volume of color 11, leaf 1 and 2, staple 35, mike 39-47, strength 26-33, and uniformity 77-82 sold for around 141.50 cents per pound, FOB car/truck (compression charges not paid).
Mixed lots containing a light volume of color 23 and better, leaf 5 and better, staple 35 and 36, mike 34-49, strength 27-33, and uniformity 77-82 sold for 129.00 to 130.00 cents, same terms as above.
A light volume of CCC-loan equities traded for 81.50 to 83.00 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

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

Central Arizona temperatures were in the 90s. Planting continued in the DSW. The crop made good progress.

San Joaquin Valley (SJV)

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

Temperatures were in the 80s, and topped the low 90s late in the period. The crop made good progress. As conditions remained dry, no insect pressures were reported.

American Pima (AP)

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

Daytime high temperatures were in the 70s to 90s for the Far West. Planting continued in the Desert Southwest and was completed in the San Joaquin Valley of California. The young cotton crop made good progress. No insect pressures were reported.