Weekly Cotton Market Review – USDA

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    Spot quotations averaged 17 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 134.59 cents per pound for the week ending Thursday, April 21, 2022.

    The weekly average was up from 134.42 cents last week and from 80.94 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 138.25 cents Monday, April 18 to a low of 132.89 cents Thursday, April 21.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 21  totaled 1,777 bales. This compares to 19,240 reported last week and 5,810 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 1,597,825 bales compared to 1,338,262 bales the corresponding week a year ago. The ICE July settlement price ended the week at 137.89 cents, compared to 140.71 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #1 FOR UPLAND COTTON April 21, 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 28, 2022, allowing importation of 10,083,800 kilograms (46,314 bales of 480-lbs) of upland cotton.

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    Quota number 1 will be established as of April 28, 2022 and will apply to upland cotton purchased not later than July 26, 2022 and entered into the U.S. not later than October 24, 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 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. A mix of sunny to cloudy conditions prevailed across the lower Southeast during the period.

    Daytime high temperatures were mostly in the 70s to low 80s. Widespread thunderstorms brought moderate precipitation to the region over the weekend. The heaviest accumulations recorded were in areas throughout Alabama and western areas of Georgia and the Florida Panhandle where 1 to 2 inches of rainfall was observed. The moisture helped reduce abnormally dry to moderate drought conditions in these areas, according to the U.S. Drought Monitor.

    Soggy conditions delayed fieldwork, but soils firmed as dry and warmer conditions prevailed later in the week. In fields where soils were firm enough to support equipment producers sprayed burndown herbicides and applied fertilizer. Planting had begun on a limited basis and was expected to advance under ideal weather conditions in the week ahead. Overcast and foggy conditions over the weekend gave way to mostly sunny skies later in the week across the upper Southeast.

    Daytime high temperatures were in the 60s and 70s. Periodic shower activity brought around one-half of an inch to one inch of weekly accumulated moisture to areas of the eastern Carolinas. Fieldwork advance with little interruption. Producers applied burndown herbicides, fertilizer, and prepped fields for planting. Planting had begun on a limited basis and was expected to expand under ideal conditions in the near term forecast.

    Textile Mill

    Domestic mill buyers inquired for a moderate volume of 2022-crop cotton, color 42 and better, leaf 5 and better, and staple 32 and longer for January through March 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. Agents for mills in Indonesia purchased a moderate volume of 2022-crop cotton, color 31, leaf 3, and staple 36 for December 2022 through January 2023 shipment. Chinese mill buyers inquired for a moderate volume of color 31, leaf 3, and staple 37 for October/November shipment.

    Trading

    • A light volume of color 31 and 41, leaf 3 and 4, staple 35-37, mike 37-49, strength 27-29, and uniformity 79-81 sold for around 143.00 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. 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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    Cooler weather entered the area lowering daytime temperatures into the upper 50s and nighttime lows in the 30s. The nearby forecast calls for warmer temperatures, but another cold front is predicted to follow. Thunderstorms brought rain accumulations of over 3 inches in some areas. The wet weather hindered fieldwork, resulting in limited planting. Producers looked for ways to reduce input costs as supply-chain disruptions continued 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 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. A cold front moved through the area lowering daytime highs into the low 60s and nighttime lows into the 40s.

    During the week up to one-half of an inch of precipitation was received throughout the area. In Louisiana, recent rainfall hindered fieldwork due to muddy fields. A few days of dry and warmer weather are in the nearby forecast, but producers have a short window for any fieldwork before precipitation is predicted to return. Some producers are looking at planting more soybean or cotton acres as wet fields hindered the planting of some corn crops.

    Virtual and in-person industry meetings were being planned and attended. Shortages of herbicides were reported as producers continued to look for ways to reduce input costs and remaining profitable.

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

    Fieldwork was active in the Rio Grande Valley with daytime highs in the mid-80s to upper 90s. Scattered thunderstorms brought light rainfall to some locations. Irrigation was underway, and fields were plowed to control weeds. Stands made good progress. Planting continued in the Upper Coast, Coastal Bend, and in south Texas. Intermittent rainfall brought a few tenths of precipitation to isolated areas. More rainfall is needed to replenish subsoil moisture.

    Stands advanced in south Texas. A significant number of acres were planted in the Blackland Prairies and seedlings had begun to emerge. In Kansas, fieldwork was active with daytime temperature highs in the 50s to 90s. Planting will begin in May. In Oklahoma, daytime temperatures were in the 80s and 90s. Windy and droughty conditions persisted in the cotton growing areas ahead of planting. Some areas received light rainfall. A general rain event would be beneficial to improve droughty conditions.

    West Texas

    Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was moderate. Average local spot prices were steady. Producer interest in forward contracting was light. Trading of CCC-loan equities was inactive. Foreign mill inquiries were moderate. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. Global economic recovery was slow. Lack of rain limited fieldwork with daytime temperature highs in the upper 50s to upper 90s.

    A cold front entered the region and beneficial rainfall was welcomed where it was received, but coverage was light and spotty. More rainfall is needed to help ease the drought. Irrigation was underway to prepare for planting. Pre-emergent herbicide was applied to control weeds even though they are not a problem at this time. Meetings were attended and the Texas Cotton Association hosted the annual convention in Galveston, Texas.

    Trading

    East Texas

    • In Texas, mixed lots containing a light volume of color 53 and better, leaf 1-5, staple 35 and 36, mike 39-47, strength 25-32, uniformity 79-82, and 50 percent extraneous matter sold for 113.50 to 117.50 cents per pound, FOB warehouse (compression charges not paid).
    • In Oklahoma, mixed lots containing a heavy volume of color 11 and 21, leaf 1 and 2, staple 34 to 36, mike 30-44, strength 26-31, and uniformity 79-81 sold for 127.25 to 133.25 cents, FOB car/truck (compression charges not paid).

    West Texas

    • A lot containing a light volume of color 11 and 21, leaf 1 and 2, staple 34, mike averaging 44.6, strength averaging 33.5, uniformity averaging 81.9, and 50 percent extraneous matter sold for around 125.00 cents per pound, FOB car/truck (compression charges not paid).
    • Mixed lots containing a light volume of color 13 and better, leaf 2 to 5, staple 35 and 36, mike 32-46, strength 26-33, and uniformity 77-82 sold for 121.00 to 123.50 cents, 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 weak. A light volume was forward contracted in the period. Most producers remained on the sidelines and continued to monitor the cotton market. No domestic mill activity was reported. Foreign mill inquiries were light. The U.S. continues in COVID-19 Pandemic status. Cotton-growing areas of the DSW were in the 80s to 90s, with no rainfall recorded in the period. Wind advisories were in effect for higher elevations in the Safford Valley late in the period.

    Cotton planting gained momentum throughout Arizona. The crop made good progress in Yuma. Initial planting began in New Mexico and El Paso, Texas. Windy and cool conditions slowed planting around eastern New Mexico. Cotton was up near Las Cruces. Throughout the DSW, producers planted acreage they could water to reach a successful harvest. Water availability remains a concern.

    According to the U.S. Drought Monitor, Arizona drought conditions were steady compared to the previous week. Cotton-growing areas were in the abnormally dry to severe drought status. In New Mexico, drought conditions were steady overall compared to the previous week, but some areas of eastern New Mexico increased to the extreme-to-exceptional drought status.

    San Joaquin Valley (SJV)

    Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were weak. 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 mostly in the low to mid-70s.

    The cold front last week brought much needed snow to the northern Sierra Nevada Mountain range. Another front entered California late in the period bringing much needed rainfall to the Valley floor. Rainfall was welcomed. A winter storm warning was in effect. Around 10-20 inches of snowfall was expected for the Sierra’s. The crop made good progress. According to the U.S. Drought Monitor, much of central California (which includes the SJV) remains in the extreme drought category.

    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. Interest was best from China. The U.S. continues in COVID-19 Pandemic status. Merchants reported shipping delays were more prevalent into the subcontinent. Shipping delays, supply chain issues, and limited labor availability are on-going.

    Temperatures were in the 70s to 90s for the Far West. A cold front entered the region and brought rain and snow late in the period. Water availability remains a concern. According to the U.S. Drought Monitor, drought status in the Far West remained steady, overall. More rain and snowfall are needed to recharge reservoirs, ground water, streams, and rivers. The crop made good progress in Arizona and California. Planting began in New Mexico and El Paso, Texas. Local sources reported some seedlings were up.

    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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