Weekly Cotton Market Review – USDA – AgFax

Spot quotations averaged slightly over 11 cents 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 97.46 cents per pound for the week ending Thursday, September 22, 2022.

The weekly average was down from 108.53 cents last week, but up from 87.71 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 101.88 cents Friday, September 16 to a season low of 93.97 cents Tuesday, September 20.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 22 totaled 3,621 bales. This compares to 7,467 bales reported last week and 9,335 spot transactions reported the corresponding week to year ago.

Total spot transactions for the season were 24,068 bales compared to 34,107 bales the corresponding week to year ago. The ICE December settlement price ended the week at 96.54 cents, compared to 103.29 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #23 FOR UPLAND COTTON September 15, 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 September 29, 2022, allowing importation of 12,112,732 kilograms (55,633 bales of 480-lbs) of upland cotton.

Quota number 23 will be established as of September 29, 2022 and will apply to upland cotton purchased not later than December 27, 2022 and entered into the US not later than March 27, 2023. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period May 2022 through July 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.

A mix of sunny to cloudy conditions was observed across the lower southeast during the period. Daytime high temperatures were in the upper 80s to mid-90s. Light to moderate precipitation was received along areas of coastal Alabama and coastal Georgia. Weekly accumulated rainfall totals measured around one to two inches. Elsewhere throughout Alabama, the Florida Panhandle, and Georgia mostly sunny and dry conditions prevailed.

The crop advanced at a good pace and bolls were cracking open. Boll rot and above average instances of hard locked bolls were observed in some areas of south Alabama and south Georgia where wet conditions had persisted in recent weeks. Producer applied defoliants and harvesting was underway in some of the earliest planted fields. The Macon Classing Office had received the first cotton samples of the season.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released September 19, bolls opening was at 60 percent in Georgia and 58 percent in Alabama; both figures near the five-year average. Plentiful sunshine dominated the weather pattern across the upper southeast during the period. Daytime high temperatures were in the 80s and 90s.

Scattered thunderstorms brought light precipitation to areas along the coastal Carolinas. The crop advanced at a good pace and bolls were cracking open. Fieldwork continued without interruption. Producers applied defoliants and harvesting had begun in the earlies planted fields. According to NASS, bolls opening was at 66 percent in North Carolina, 65 in Virginia, and 54 percent in South Carolina; figures all ahead of the five-year average.

textile mill

Domestic mill buyers inquired for a moderate volume of 2022-crop cotton, color 41, leaf 4, and staple 34 and 35 for first and second quarter 2023 delivery. No sales were reported. Domestic mill buyers noted a slight downturn in yard demand. The undertone from mill buyers remained cautious. Mills continued to produce personal protective equipment for frontline workers and consumers. Demand through export channels was moderate. Agents throughout the Far East inquired for any discounted styles of cotton.

Trading

  • No trading activity was reported.

South Central Markets Regional Summary

North Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was very light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. The Covid-19 virus continues to negatively impact domestic and international marketing channels, consumer-goods supply chains, and the labor force overall.

Warm and clear conditions prevailed during the week. Daytime temperatures progressed during the period and topped out in the low 100s before falling back into the mid-80s. Overnight lows were in the 60s and 70s. No rainfall was reported in most areas of the Memphis territory. The crop made good progress under hot conditions. Boll opening advanced steadily in various parts of the territory. Defoliation gained momentum. Ginning was expected to commence when sufficient modules had accumulated on gin yards. Producers prepared harvest equipment.

According to the National Agricultural Statistics Service’s (NASS) Crop Progress report, released on September 19, boll opening advanced to 81 percent complete in Arkansas, 55 in Missouri, and 46 percent in Tennessee. NASS reported that the crop condition in Arkansas was 65 percent good to excellent, 82 percent fair to good in Missouri, and 70 percent fair to good in Tennessee. Virtual and in-person industry meetings were being planned and attended.

South Delta

Spot cotton trading was inactive. Supplies of available cotton were light. Demand was very light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. No forward contracting was reported. Domestic and international marketing channels, supply chains, and the labor force overall are still being negatively affected by the Covid-19 virus.

Hot and dry conditions dominated climatic conditions throughout the region during the week. Daytime temperatures were in the 80s and 90s. Overnight temperatures ranged from the low to upper 90s during the period. No precipitation was reported. Defoliation was in full swing as the pace of boll opening continued to increase. Harvesting was well underway in Louisiana and was gaining momentum in Mississippi.

Ginning had begun, but a few gins were concerned about the availability of workers in Louisiana. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report, released on September 19, boll opening advanced to 91 percent complete in Louisiana and 72 in Mississippi. NASS reported that harvesting was underway in Louisiana at 13 percent completed and 5 in Mississippi, which compares to the 5-year average of 12 and 4 percent respectively. Virtual and in-person industry meetings were being planned and attended.

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 light. Supplies and producer offerings were moderate. Demand was moderate. Producers continued to deliver bales to fulfill contracts. Average local spot prices were lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Mill inquires increased as ICE December futures trended under one dollar in the period. Interest was best from Bangladesh and Pakistan. The US remained in COVID-19 Pandemic status.

Cloudy and humid conditions were the norm. The Rio Grande Valley (RGV) received around one-half of an inch up to three-quarters of an inch of rainfall early in the period. Ginning continued in the RGV and the Blacklands Prairie. Many Coastal Bend gins completed operations in the period. A few Kansas fields had been defoliated, but not widespread. The Kansas and Oklahoma crops approached cut-out stage. The Corpus Christi Classing Office has classified approximately 70 percent of the east and south Texas crop.

west texas

Spot cotton trading was inactive. Supply and demand were light. Average local spot prices were lower. Foreign mill inquiries were light for 2022-crop cotton. Mill interest increased when ICE December futures fell below one dollar this report period.

Daytime high temperatures were in the high 80s to 90s. Scattered showers brought around one-quarter of an inch of rainfall early in the reporting period. Insurance adjusters continued to evaluate fields to determine harvest or abandonment. A few west Texas gins will not operate for the season. Most gins indicated that they would operate 1 shift and many will not begin ginning until they accumulate enough modules of the gin yard to gin non-stop. Some producers prepared for harvest. The annual Flow/Marketing meeting was attended by the industry.

Trading

East Texas

  • A moderate volume mixed lot of mostly color 21 and better, leaf 2 and better, staple 36, mike 44-49, strength averaging 33.1, and uniformity averaging 81.9 sold for 102.50 to 104.00 cents per pound, FOB warehouse (compression charges not paid) .
  • A similar mixed lot of light volume containing staple 33 and 34 sold for around 97.00 cents, same terms as above.

west texas

  • 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 lower. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. The US continues in COVID-19 Pandemic status.

Temperatures were in the 90s in Arizona. Flash flood warnings are in effect for central and eastern Arizona as monsoon activity ramped up in the week. Precipitation amounts up to one-half of an inch to three-quarters of an inch were recorded throughout the week. Modules were trucked to the gin yard. Ginning continued without interruption in Yuma. Bolls were cracking open in New Mexico and El Paso, Texas. Producers’ equipment prepared for harvest.

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 US remains in COVID-19 Pandemic status.

Mild weather conditions were prevalent in the period. Temperatures were in the 70s and 80s. Clouds and winds brought scattered showers to the Valley mid-week. Isolated heavy showers were received in Fresno County. Defoliation activities advanced. Ginning was set to begin in mid-October.

American Pima (AP)

Spot cotton trading was inactive. Supplies and demand were light. Producers price ideas were firm for new-crop cotton. No forward contracting was reported. Average local spot prices were steady. No domestic mill activity was reported. Foreign mill inquiries were light. Interest was best from India, Japan, and Thailand. The US remains in COVID-19 Pandemic status.

Temperatures ranged in the 70s to 90s throughout the Far West. Cloudy and humid conditions were reported in Arizona, California, and New Mexico. Monsoon activity in the Desert Southwest brought rainfall. The crop approached cut-out stage. Bolls were cracking open. Local sources reported defoliation could start early next week. Precipitation amounts were measured at one-half of an inch up to three-quarters of an inch. Defoliation activities pick up in the San Joaquin Valley of California.

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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