Weekly Cotton Market Review – USDA

Spot quotations averaged 214 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 132.72 cents per pound for the week ending Thursday, April 7, 2022.

The weekly average was down from 134.86 cents last week, but up from 74.97 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 135.23 cents Monday, April 4 to a low of 129.63 cents Thursday, April 7.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 7 totaled 23,939 bales. This compares to 16,268 reported last week and 7,787 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,576,808 bales compared to 1,323,320 bales the corresponding week a year ago. The ICE May settlement price ended the week at 133.20 cents, compared to 135.69 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #25 FOR UPLAND COTTON April 7, 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 April 14, 2022, allowing importation of 10,083,800 kilograms (46,314 bales of 480-lbs) of upland cotton.

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Quota number 25 will be established as of April 14, 2022 and will apply to upland cotton purchased not later than July 12, 2022 and entered into the U.S. not later than October 10, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period December 2021 through February 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 lower. 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.

Severe thunderstorms produced damaging winds, heavy rainfall, and spawned a number of tornadoes across Alabama and central Georgia during the week. A state of emergency was declared in Georgia as the storms were responsible for at least one death in the state. Strong winds damaged homes and businesses and toppled trees and power lines leaving thousands without power.

Precipitation totals measured 2 to 5 inches with heavier amounts recorded in portions of central Georgia. Flash flooding was reported in low-lying areas. The moisture eased abnormally dry and/or moderate drought conditions in the lower Southeast, according to the U.S. Drought Monitor. Fieldwork remained at a standstill as fields remained too wet to support equipment.

A system of strong thunderstorms brought a similar outbreak of severe weather to South Carolina late in the week with strong winds, heavy rainfall, and hail. Several tornadoes were reported which damaged homes, downed trees, and power lines. Precipitation totals measured 3 to 5 inches throughout the state and along areas of coastal North Carolina. The moisture was welcomed in the eastern Carolinas where moderate to severe drought conditions persisted. Fieldwork was delayed by the wet weather.

Textile Mill

Domestic mill buyers inquired for a moderate volume color 41, leaf 4 and better, and staple 36 and longer for November/December delivery. No sales were reported. Most mills had covered their nearby raw cotton needs. 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. Agents for mills in Indonesia and Vietnam inquired for a moderate volume of color 31, leaf 3, and staple 36 for July through December 2022 and January through June 2023 shipment. No sales were reported.

Trading

• No trading activity was reported.

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 lower. Trading of CCC-loan equities was slow. 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 marketing channels, domestic supply chains, and the labor force overall.

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Seasonably mild weather prevailed during most of the report period. Daytime high temperatures were in the 60s to 70s. Overnight low temperatures were in the 40s to 50s. A cold front brought rain showers to the region mid-week. Up to 1 inch of rain was reported in many places. Standing water in some fields was observed as soils remained saturated throughout the territory. Pockets of moderate drought persisted in southern Arkansas, due to a lack of rainfall in that particular area.

Virtual and in-person industry meetings were being planned and attended. According to the National Agricultural Statistics Service’s Prospective Planting report, released on March 31, cotton acreage in Arkansas is expected to increase by 8 percent compared to last year, 21 in Missouri, and 20 percent in Tennessee. Producers continued to look for ways to reduce input costs, while remaining profitable as supply-chain disruptions continue to plague the agricultural sector nationwide.

South Delta

Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were lower. 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.

Unsettled weather prevailed during most of the report period. Daytime high temperatures were in the 70s and 80s. Overnight low temperatures were in the 40s to 60s. Clear and windy conditions prevailed early in the week. A series of rain showers moved through the region mid-week. Less than one-half of an inch of rain was reported in most areas. Areas of moderate drought persisted in some cotton-producing regions of Louisiana and Mississippi.

The lack of soil moisture was hindering fieldwork in a few of the driest places. Virtual and in-person industry meetings were being planned and attended. According to the National Agricultural Statistics Service’s Prospective Planting report, released on March 31, cotton acreage in Louisiana is expected to increase by 82 percent compared to 2021 and 11 percent in Mississippi. Producers continued to look for ways to reduce input costs, while remaining profitable as supply-chain disruptions continue to plague the agricultural sector nationwide.

Trading

North Delta

• A light volume of CCC-loan equities traded for around 81.00 cents per pound.
• Producers booked a light volume of 2022-crop cotton for CCC-loan equities of 54.00 to 56.00 cents.

South Delta

• No trading activity was reported.
• Producers booked a light volume of 2022-crop cotton for CCC-loan equities of 54.00 to 56.00 cents per pound.

Southwestern Markets Regional Summary

East Texas

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

Planting continued in the Upper Coast, Coastal Bend, and parts of South Texas with daytime temperatures in the low 70s to mid-80s. Some producers had completed cotton planting, and some waited for rainfall to ensure germination. Seedlings had begun to emerge. The last plant day in the Rio Grande Valley was March 31. Stands were established and producers hoped for rainfall. Thunderstorms and gusting winds stalled fieldwork in the Blackland Prairies. Fields were soggy.

In Kansas, fieldwork was active with daytime temperature highs in the upper 50s to mid-70s, and overnight lows in the 30s to 40s. Producers prepped fields. Planting seed was delivered. Good corn prices caused wavering on planting cotton. In Oklahoma, beneficial rainfall was received that slowed fieldwork.

West Texas

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

The Panhandle, parts of the eastern High Plains, and the Rolling Plains received intermittent rainfall with daytime temperature highs in the low 60s to low 90s, and overnight lows in the 30s to 50s. Any rainfall is beneficial, but more precipitation will be needed. Droughty conditions persisted. Westwardly, warm wind gusting more than 55 miles per hour stalled fieldwork early in the period.

A cold front blew in mid-week shifting northerly winds that dropped overnight temperatures to near freezing. Cover crops were irrigated when the wind subsided. End of season ginning continued. Producers developed strategies to manage the higher input production costs associated with fuel, fertilizer, and herbicide. Meetings were attended.

Trading

East Texas

• In Oklahoma, mixed lots containing a heavy volume of color 33 and better, leaf 5 and better, staple 33, mike 33-46, strength 26-35, and uniformity 75-82 sold for 124.00 to 124.50 cents per pound, FOB car/truck (compression charges not paid).
• A moderate volume of CCC-loan equities traded for 65.50 to 70.00 cents.

West Texas

• A lot containing a heavy volume of color 12 and better, leaf 3 and better, staple 37, mike averaging 38.2, strength averaging 30.1, and uniformity averaging 79.9 sold for around 134.50 cents per pound, FOB car/truck (compression charges not paid).
• Lots containing a heavy volume of color 22 and better, leaf 4 and better, staple 35 and longer, mike 33-49, strength 26-33, and uniformity 76-82 sold for 127.00 to 133.50 cents, same terms as above.
• A heavy volume of lots containing color 32 and better, leaf 5 and better, staple 33 and longer, mike 33-47, strength 25-32, and uniformity 75-82 sold for 124.75 to 126.00 cents, same terms as above.
• A lot containing a light volume of color 22 and better, leaf 3 and better, staple 36, mike 31-42, strength 28-34, and uniformity 77-81 sold for around 121.75 cents, same terms as above.
• A heavy volume of CCC-loan equities traded for 63.75 to 68.00 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 or domestic mill activity was reported. Foreign mill inquiries were light. The U.S. continues in COVID-19 Pandemic status.

Central Arizona temperatures were in the high 80s to mid-90s. Planting gained momentum in central Arizona. The crop made good progress in Yuma, AZ. Producers attended in-person seminars and workshops. Temperatures in New Mexico and El Paso, TX were in the 70s and 80s. Fieldwork progressed and cotton fields were ready for planting. Some produces continued with pre-plant irrigations.

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.

Sunny skies and warm temperatures were prevalent in the week. Daytime high temperatures were in the high 70s to mid-80s. On April 7, temperatures nearly broke records when Valley temperatures reached 92 degrees. The fourth and final snow survey conducted by the CA Department of Water Resources (DWR) measured 2.5 inches of snow, with approximately 1 inch of snow water equivalent on April 1.

The DWR estimated the statewide snowpack as 30 percent of normal for April 6. Many producers finished planting over the weekend. Sources reported cotton was up. Warm conditions helped germinate seedlings. The California Cotton Ginners & Growers Association reported SJV growers intended to increase plantings by 10 percent. The Association estimated around 24,000 acres of Upland.

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. Shipping delays, supply chain issues, and limited labor availability are continuing challenges.

Very warm temperatures continued for the region. Temperatures were in the 70s to 90s, with the potential for record breaking heat late in the reporting period. No rainfall was recorded in the Far West. The fourth and final snow survey conducted by the CA Department of Water Resources (DWR) measured 2.5 inches of snow, with approximately 1 inch of snow water equivalent on April 1. The DWR estimated the statewide snowpack as 30 percent of normal for April 6.

The crop made good progress in Yuma, AZ. Planting neared completion in the San Joaquin Valley of California. Local sources reported some seedlings were up. The California Cotton Ginners & Growers Association reported SJV growers intended to increase plantings by 10 percent. The Association estimated around 108,600 acres of AP.

Trading

Desert Southwest

• No trading activity was reported.

San Joaquin Valley

• No trading activity was reported.

American Pima

• No trading activity was reported.