Spot quotations averaged over 13 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 122.67 cents per pound for the week ending Thursday, August 18, 2022.
The weekly average was up from 109.36 cents last week, and from 91.06 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 118.80 cents Friday, August 12 to a season high of 126.61 cents Tuesday, August 16.
Spot transactions reported in the Daily Spot Cotton Quotations for the week ended August 18 totaled 1,737 bales. This compares to 1,763 bales reported last week and 3,545 spot transactions reported the corresponding week a year ago.
Total spot transactions for the season were 3,811 bales compared to 7,235 bales the corresponding week a year ago. The ICE October settlement price ended the week at 117.12 cents, compared to 110.44 cents last week.
USDA ANNOUNCES SPECIAL IMPORT QUOTA #18 FOR UPLAND COTTON August 18, 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 August 25, 2022, allowing importation of 12,641,719 kilograms (58,062 bales of 480-lbs) of upland cotton.
Quota number 18 will be established as of August 25, 2022 and will apply to upland cotton purchased not later than November 22, 2022 and entered into the U.S. not later than February 20, 2023. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period April 2022 through June 2022, the most recent three months for which data are available.
Future quotas, in addition to the quantity announced today, will be established if price conditions warrant.
Cotton and Wool Outlook Update
The following information was excerpted from the Cotton & Wool Outlook report, released on August 16, 2022
Upland cotton production in 2022 is forecast at 12.2 million bales, 29 percent (5 million bales) below 2021 and the smallest crop since 2009. During the past 20 years, the August upland production forecast was above the final estimate 12 times and below it 8 times. Past differences between the August forecast and the final production estimates indicate a 2 out of 3 chance for the 2022 upland crop to range between 11 million and 13.3 million bales.
Compared with 2021, U.S. upland production expectations are slightly different for three of the Cotton Belt regions in 2022, with the Southwest crop considerably lower than 2021. Based on the August estimates, 2022 Southwest upland production is forecast at 3.3 million bales, compared with 8.6 million bales last season and the smallest crop since 1989.
With inadequate moisture conditions limiting plant growth this season, the 2022 Southwest abandonment is projected at a record 67 percent. The Southwest yield is forecast at 621 pounds per harvested acre in 2022, the lowest in 3 years. The Southwest is expected to account for about 28 percent of total U.S. upland production in 2022, compared with 50 percent last season.
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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Mostly cloudy conditions were observed across the lower Southeast during the week. Daytime high temperatures were in the upper 80s to low 90s. Scattered thunderstorms brought moderate precipitation to portions of the Gulf and Atlantic coastal areas. Weekly accumulated rainfall totals measured 1 to 3 inches, with heavier downpours recorded in localized areas. Farther inland, portions of the lower Southeast received around one-half of an inch of moisture.
The crop progressed well, squaring neared completion, and heavy boll loads were reported in many fields. Bolls were cracking open across the region. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 15, boll-setting advanced to 93 percent in Alabama and 87 percent in Georgia; bolls opening were 7 percent in Alabama and 6 percent in Georgia.
A mix of sunny to cloudy conditions prevailed across the upper Southeast during the week. Daytime high temperatures were mostly in the 80s to low 90s. Scattered thunderstorms brought moderate precipitation to cotton growing areas of the eastern Carolinas and Virginia during the period. Weekly accumulated moisture totals measured around 1 to 3 inches, with heavier precipitation observed in localized areas.
The crop progressed well and bolls were cracking open. According to NASS, boll-setting advanced to 93 percent in Virginia, 87 in South Carolina, and 77 percent in North Carolina; bolls opening were at 5 percent in Virginia, 3 in North Carolina, and 2 percent in South Carolina.
Domestic mill buyers inquired for a moderate volume of 2022-crop cotton, color 41, leaf 4, and staple 34 and longer for January through December 2023 delivery. No sales were reported. Yarn demand remained good, but 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.
- No trading activity was reported.
South Central Markets Regional Summary
Spot cotton trading was slow. 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 Pandemic continues to negatively impact the overall global economy and supply chains.
Mostly cloudy conditions dominated the weather pattern during the period. Daytime temperature highs were in the 80s and briefly dipped into the 70s as a storm system moved across the region during the week. Overnight lows were in the 60s. Widespread thunderstorms brought moisture to cotton growing areas of the bootheel of Missouri, northeast Arkansas, and west Tennessee.
Weekly accumulated precipitation totals measured from one-quarter of an inch to around 2 inches of moisture. The crop made good progress, and the rainfall was welcome in areas where droughty conditions persisted. Producers scouted fields and applied growth regulators and insecticides in between rain events. Bolls were cracking open in the earliest planted fields.
According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released August 15, boll-setting advanced to 98 percent in Arkansas, 91 in Tennessee, and 82 percent completed in Missouri; figures at or slightly ahead of the five-year average.
Spot cotton trading was slow. Supplies and demand of available cotton were light. Average local spot prices were higher. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy and supply chains.
Sunny to cloudy weather conditions prevailed during the period. Daytime high temperatures were in the 90s to low 100s, with overnight lows in the 70s. Spotty shower activity brought moisture to portions of north Louisiana and north Mississippi during the week. Isolated rainfall totals measured up to 2 inches.
Producers welcomed the moisture in areas where droughty conditions persisted. The crop made good progress under hot and humid conditions. Producers applied growth regulators during dry weather and scouted fields for pests. Bolls were cracking open. According to (NASS), boll-setting advanced to 95 percent in Louisiana and 88 percent in Mississippi; bolls opening advanced to 34 percent in Louisiana and 7 percent in Mississippi.
- A light volume of 2021-crop CCC-catalog cotton, color 41, leaf 3, staple 36 and longer, mike 42-44, strength 29-33, uniformity 81-83, and containing 100 percent extraneous matter (plastic) sold for around 33.00 cents per pound, FOB warehouse (compression charges not paid).
- A light volume of color 43 and better, leaf 3-5, staple 37 and longer, mike 43-52, strength 28-31, and uniformity 81-83 sold for around 77.25 cents per pound, FOB car/truck (Rule 5 compression charges paid).
Southwestern Markets Regional Summary
Spot cotton trading was slow. Supplies and producer offerings were moderate. Demand was 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. Labor, transportation, and logistics continued to be negatively impacted by the COVID-19 Pandemic.
A tropical depression brought widespread rainfall to the Rio Grande Valley (RGV), Coastal Bend (CB), and Upper Coast (UC), with daytime highs in the low 80s to upper 90s. Rain totals were lighter in the UC. Local sources reported that up to 14 inches of precipitation were received in the CB. Most areas received between 2 to 5 inches of precipitation. Fields were so dry that the moisture absorbed into the soil with very little runoff, and producers expect to resume fieldwork by the end of the reporting period.
Field activities included final harvesting and destroying cotton stubble. Fields in the RGV and CB were estimated to be 75 percent harvested and 65 percent harvested in the UC. Module trucks were able to provide continued service at most locations. Flash flooding occurred mostly in towns and cities. Harvesting and ginning had begun in the Blackland Prairies and quickly advanced, until heavy rain fell late in the reporting period.
Fields were soggy and fieldwork was interrupted. Trucks delivered modules to the gin yards ahead of the rain events. Samples were transported to the Corpus Christi Classing Office for grading.
In Kansas, hot and dry conditions prevailed with daytime temperatures in the low 80s to low 100s. Stands were blooming, and the later planted fields had begun to bloom. Hoe crews were in fields removing weeds manually because of herbicidal resistance. Some treatments were applied for insects. In Oklahoma, rainfall improved crop vigor on dryland and irrigated fields. Insects were light.
Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was 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. Logistics continued to be negatively impacted by the COVID-19 Pandemic.
A cold front entered the region and brought thunderstorms with high temperatures in the upper 70s to low 100s. Recent rainfall and below-normal temperatures eased heat stress and helped stands advance. Rain chances increase in the nearby forecast. Plants developed the final blooms that would make harvestable bolls, as the last effective bloom date is approaching. Irrigation continued, but some producers were finalizing irrigation.
Beneficial insects helped to keep down pest thresholds. Stink bug activity was light, but localized areas were sprayed for lygus and mites. Bollworm damage was observed in the organic stands, according to local sources. Plant growth regulators were applied as needed. Although weeds were light, some fields were cultivated.
- In Texas, a heavy volume containing mostly color 12 and better, leaf 1 and 2, staple 36, mike averaging 41.6, strength averaging 30.0, and uniformity averaging 81.8 sold for around 122.25 cents per pound, FOB warehouse (compression charges not paid).
- A light volume of lots containing color 31 and better, leaf 3 and better, staple 33 and longer, mike 38-43, strength 25-29, and uniformity 79-81 sold for around 121.00 cents, same terms as above.
- A light volume of mixed lots containing color 11 and 21, leaf 4 and better, staple 33 and longer, mike 37-46, strength 26-30, and uniformity 79-82 sold for 110.00 to 113.00 cents, same terms as above.
- No trading activity was reported.
Western Markets Regional Summary
Desert Southwest (DSW)
Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were higher. Producers showed some interest in contracting for the purpose of price discovery. No domestic mill activity was reported. No sales were reported. Foreign mill inquiries were light. The U.S. continued in COVID-19 Pandemic status.
Monsoonal activity brought blowing dirt and rainfall to Arizona and New Mexico. Thunderstorms brought trace to one and one-quarter of an inch of precipitation that helped the crop, and especially dryland fields. The crop advanced, and yields were expected to be above average at most locations. Picker harvesting continued in Yuma, AZ, but not all fields were ready for harvest. Beneficial rainfall was received in El Paso, TX, and the crop advanced. Producers were encouraged with recent rainfall.
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. remained in COVID-19 Pandemic status.
The crop advanced under hot and dry conditions, with daytime high temperatures in the low to mid-100s. Final irrigation water was applied. Bolls were filling in and maturing. Producers prepared equipment for harvest. Gins maintained and repaired equipment ahead of the ginning season.
American Pima (AP)
Spot cotton trading was inactive. Supplies of 2021-crop were light. Demand for 2022-crop was very good. Producers showed some interest in contracting for the purpose of price discovery. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. Interest was best from China and India. The U.S. remains in COVID-19 Pandemic status.
Stands advanced in the San Joaquin Valley with daytime high temperatures in the low to mid-100s. Final irrigation water was applied. Recent rainfall in Arizona helped the crop advance but caused southwestern cotton rust and Alternaria, where heavier amounts of precipitation had been received. Stands continued blooming. New Mexico and El Paso, TX received beneficial rainfall. Reports indicated a good boll load. Insects were light.
- No trading activity was reported.
San Joaquin Valley
- No trading activity was reported.
- No trading activity was reported.