Weekly Cotton Market Review – USDA

    Cotton planting. ©Debra L Ferguson Stock Photography

    Spot quotations averaged 53 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 134.06 cents per pound for the week ending Thursday, April 28, 2022.

    The weekly average was down from 134.59 cents last week, but up from 84.92 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 130.41 cents Monday, April 25 to a high of 142.68 cents Thursday, April 28.

    Spot transactions reported in the Daily Spot Cotton Quotations for the week ended April 28 totaled 4,153 bales. This compares to 1,777 reported last week and 10,838 spot transactions reported the corresponding week a year ago.

    Total spot transactions for the season were 1,601,978 bales compared to 1,349,100 bales the corresponding week a year ago. The ICE July settlement price ended the week at 147.68 cents, compared to 137.89 cents last week.

    USDA ANNOUNCES SPECIAL IMPORT QUOTA #2 FOR UPLAND COTTON April 28, 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 5, 2022, allowing importation of 10,083,800 kilograms (46,314 bales of 480-lbs) of upland cotton.

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    Quota number 2 will be established as of May 5, 2022 and will apply to upland cotton purchased not later than August 2, 2022 and entered into the U.S. not later than October 31, 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 slow. 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.

    Sunny to partly cloudy conditions prevailed during most of the week. Daytime high temperatures were in the 70s and 80s. Scattered thunderstorms brought only trace amounts of rainfall to portions of Alabama and the Florida Panhandle. Droughty conditions in portions of the interior Southeast expanded slightly, according to the U.S. Drought Monitor.

    Fieldwork and activities were in progress in areas where soils were firm enough to support equipment. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report, released on April 25, planting was underway in Alabama at 1 percent and 3 percent in Georgia.

    A mix of sunny to cloudy conditions were observed across the upper Southeast during the period. Daytime high temperatures in the 60s and 70s over the weekend warmed into the 80s later in the week. Scattered thunderstorms brought very little moisture to areas of coastal South Carolina and eastern North Carolina and Virginia. Weekly accumulated precipitation totals measured from trace amounts to around 1 inch of moisture.

    Fieldwork advanced in areas where dry conditions allowed. According to NASS, planting was underway in South Carolina at 1 percent, 3 in North Carolina, and surged to 12 percent in Virginia.

    Textile Mill

    Domestic mill buyers inquired for a moderate volume of color 41, leaf 4 and better, and staple 34 and longer for November through March 2023 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 throughout the Far East inquired for any discounted styles of cotton. No sales were reported.

    Trading

    • A light volume of color 31 and better, leaf 5 and better, staple 36 and longer, mike 37-47, strength 29-34, and uniformity 80-83 traded for around 146.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).

    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 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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    A cold front early in the period brought more wet weather to the territory. Heavy thunderstorms resulted in accumulations of over 3 inches of rain to some areas. Daytime high temperatures dropped from the 80s to the 60s, then rose into the 70s by the end of the week. Overnight low temperatures were in the 40s to 60s. Virtual and in-person industry meetings were being planned and attended. According to the U.S. Drought Monitor, drought-stricken areas in southern Arkansas received some relief from recent rainfall.

    Producers looked for ways to reduce input costs as supply-chain disruptions continued to plague the agricultural sector nationwide. Shortages of herbicides were reported as producers continued to look for ways to reduce input costs and remain profitable. According to the National Agricultural Statistics Service’s Crop Progress report, released on April 25, planting was underway at 2 percent complete in Arkansas. No planting was reported in Missouri or Tennessee.

    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.

    A series of rain showers brought cooler temperatures and more moisture to the region early in the week. Up to 1 inch of rain was reported in most places. Daytime high temperatures were in the 60s to 80s. Overnight low temperatures were in the 40s to 60s. Virtual and in-person industry meetings were being planned and attended. According to the U.S. Drought Monitor, extreme drought conditions in areas of northern Louisiana and central Mississippi improved slightly.

    Recent rainfall hindered fieldwork in a few places due to muddy fields. 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 remain profitable. According to the National Agricultural Statistics Service’s Crop Progress report, released on April 25, planting had reached 14 percent complete in Louisiana and was underway in Mississippi at 2 percent.

    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 lower. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was slow. Foreign mill inquiries were light. Interest was best from India, Mexico, and Taiwan. The COVID-19 Pandemic continued to place pressure on logistics. Global economic recovery was slow.

    Thundershowers brought more than 5 inches of beneficial rainfall to the Rio Grande Valley. Daytime high temperatures were in the mid-70s to low 90s. The rain was beneficial and invigorated early season development. The Coastal Bend and Upper Coast received beneficial rainfall, and the stands made good progress. Planting neared completion in the Upper Coast, and in south Texas.

    A significant number of acres were planted in the Southern Blackland Prairies and seedlings had begun to emerge. Some stands were at the 2 true leaf stage. Stands struggled to germinate and emerge in the Northern Blackland Prairies because of a lack of moisture.

    In Kansas, fieldwork was active with daytime temperature highs in the low 70s to low 90s. Overnight temperatures were in the 30s to 60s. Some test plots were planted, but sowing was expected to expand next week. Producers were finalizing corn planting before starting cotton planting. No significant rainfall was received. In Oklahoma, cover crops were terminated ahead of planting. The eastern counties received significant rainfall, but most of the acreage needed precipitation. Planting seed was delivered.

    West Texas

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

    One-quarter to one-half inch of rain was received at some locations. Daytime temperature highs were in the mid-60s to mid-90s. A slow soaking rain event is needed to help alleviate droughty soils and improve planting conditions. Experts reported that soil temperatures were in the optimal range for planting, but a few cold fronts dropping overnight temperatures into the low 30s were unfavorable to seedlings.

    Planting of Upland seed varieties is expected to expand next week after the hybrid variety is sown. Reports indicated that initial planting was attempted, but soils were too dry to continue. Seed was delivered to some producers through the local gins.

    Trading

    East Texas

    • In Oklahoma, a lot containing a light volume of color 31 and better, leaf 3 and better, staple 37, mike 35-44, strength 27-33, and uniformity 79-82 sold for around 140.50 cents per pound, FOB car/truck (compression charges not paid).
    • A heavy volume of color 41 and better, leaf 4 and better, staple 36, mike 27-34, strength 26-36, and uniformity 75-82 sold for around 125.50 cents, same terms as above.
    • Lots containing a light volume of color 21 and 31, leaf 2 to 4, staple 36 and 37, mike 28-39, strength 28-31, uniformity 79-83, and 25 percent extraneous matter sold for 112.00 to 113.00 cents, same terms as above.
    • A light volume of CCC-loan equities traded for around 76.00 cents.

    West Texas

    • A light volume of color 31 and better, leaf 4 and better, staple 35, mike 35-45, strength 25-35, and uniformity 78-82 sold for around 138.00 cents per pound, FOB car/truck (compression charges not paid).
    • Mixed lots containing a light volume of color 23 and better, leaf 6 and better, staple 33 to 35, mike 24-42, strength 25-32, uniformity 76-80, and 25 percent extraneous matter sold for 117.50 to 119.00 cents, same terms as above.
    • A light volume of CCC-loan equities traded for 58.25 to 63.00 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. Most producers remained on the sidelines and monitored early crop progress and the volatile cotton market before committing additional bales for contract. ICE December futures gained nearly 5 cents in the week. Foreign mill inquiries were light. The U.S. continues in COVID-19 Pandemic status.

    Daily temperatures in the 90s advanced planting and the young crop in Arizona. Cotton planting continued throughout Arizona. Sources estimated the crop was 60 to 65 percent planted. Planting made good progress in New Mexico and El Paso, TX. Ginners and industry representatives prepared to attend the National Cotton Ginners Association, Western Ginners School in Mesilla Park, NM May 4 and 5.

    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 mostly in the low 70s and 80s. A late season storm brought much needed moisture to the Valley floor and fresh snowfall to the Sierra Nevada Mountain range early in the reporting period. Scattered showers produced around one-quarter of an inch of rain.

    On April 26, the Metropolitan Water District of Southern California took unprecedented action. They declared a water shortage emergency for business and residential areas to restrict outdoor watering to 1 day a week starting June 1. Residents are asked to cut water usage by 20 to 30 percent. The crop made excellent progress. Early stand establishment and development was uniform. Plant populations were high.

    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. Producers were in no rush to contract new-crop as prices remained at current high levels. Foreign mill inquiries were light. The U.S. continues in COVID-19 Pandemic status. Logistics in shipping cotton remained lackluster. Steamship response in handling remained very slow.

    China’s continued lockdown compounds the shipping situation. According to the Foreign Agricultural Service Export report, 40,600 bales of 2022-crop were committed for the next marketing year. This compares to 3,600 bales this same time period last year.

    Droughty conditions continued throughout the Far West. Temperatures were in the 70s to 90s for the Far West. A late season storm brought much needed moisture to the San Joaquin Valley floor of California and fresh snowfall to the Sierra Nevada Mountain range early in the reporting period. Scattered showers produced around one-quarter of an inch of rain. Sources reported the germination rates were good.

    Cotton stands were uniform and developing normally. Some cotton fields reached 2 to 3-true leaf stage. The crop made good progress in the Desert Southwest. Planting gain momentum in New Mexico and Texas. Local sources reported some seedlings were up in New Mexico and El Paso, TX. Lubbock area producers began planting during the period. Plantings were done in irrigated fields.

    Save the date: The Visalia Classing Office will host the annual American Pima Guide Box Matching on July 20.

    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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