Agriculture

Weekly Cotton Market Review – USDA – AgFax

Spot quotations averaged 368 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 118.69 cents per pound for the week ending Thursday, February 17, 2022.

The weekly average was down from 122.37 cents last week, but up from 84.73 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 121.32 cents Friday, February 11 to a low of 117.28 cents Wednesday, February 16.

Spot transactions reported in the Daily Spot Cotton Quotations for the week ended February 17 totaled 29,496 bales. This compares to 51,966 reported last week and 9,626 spot transactions reported the corresponding week a year ago.

Total spot transactions for the season were 1,382,242 bales compared to 1,231,445 bales the corresponding week a year ago. The ICE May settlement price ended the week at 119.52 cents, compared to 123.20 cents last week.

USDA ANNOUNCES SPECIAL IMPORT QUOTA #18 FOR UPLAND COTTON February 17, 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 February 24, 2022, allowing importation of 10,197,690 kilograms (46,837 bales of 480-lbs) of upland cotton.

Quota number 18 will be established as of February 24, 2022 and will apply to upland cotton purchased not later than May 24, 2022 and entered into the U.S. not later than August 22, 2022. The quota is equivalent to one week’s consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period October 2021 through December 2021, 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 moderate. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were lower. Trading of CCC-loan equities was inactive. The COVID-19 Pandemic continues to disrupt labor availability and logistics. Vaccination doses were being distributed.

A mix of sunny to partly cloudy conditions prevailed across the upper Southeast during the period. Daytime high temperatures were mostly in the upper 50s to upper 60s. Light intermittent shower activity was received along the Gulf and Atlantic coastal areas. Rainfall totals measured from trace amounts to around one inch of moisture. Fieldwork advanced without interruption; producers mowed stalks and prepared fields for spring planting. A number of gins remained on gin days as they waited for the last modules of the season to arrive on gin yards.

Mostly sunny conditions prevailed across the upper Southeast during the week. Unseasonably warm daytime high temperatures in the 70s dipped into the 50s over the weekend as a cold front moved across the region, but warmed back into the 70s late week. Light intermittent shower activity was received along coastal areas. Producers welcomed the moisture in areas where abnormally dry conditions persisted. Ginning rapidly neared completion; some gins remained on gin days as they waited on the last modules of the season to arrive on gin yards.

Textile Mill

Domestic mill buyers inquired for a moderate volume color 41, leaf 4, and staple 34 and longer for second and third quarter delivery. No sales were reported. No additional inquiries were reported. Reports indicated most mills had covered their raw cotton needs through early summer. 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. Logistics issues and backlogs at the ports caused domestic shippers to maintain a cautious undertone. Demand was good throughout the Far East for any discounted styles of cotton.

Trading

  • A moderate volume of color mostly 31 and 41, leaf 3-5, staple mostly 37 and 38, mike 35-49, strength 28-32, and uniformity 80-82 sold for around 122.00 cents per pound, FOB car/truck (Rule 5, compression charges paid).
  • A light volume of color 42, leaf 4 and 5, staple 36 and longer, mike 35-49, strength 29-31, and uniformity 79-81 sold for around 117.00 cents, same terms as above.

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. No forward contracting was reported. Cotton was being delivered to fulfill contracts. 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.

Spring-like weather prevailed during most of the report period. The daytime high temperatures climbed briefly into the 70s before another cold front dropped them back into the 40s. Overnight low temperatures were in the 20s to the low 40s. Skies were mostly clear and less than one-half of an inch of rain was reported. Clean-up from the recent ice storm continued. Producers focused much of their attention on fertilizer requirements for good crop yields, including correct soil analysis and the increased use of variable rate application technology, in view of rising costs.

Inflation continued to pressure the economy. Virtual and in-person industry meetings were being planned and attended. According to the U.S. Drought Monitor, drought conditions improved somewhat in the southern part of Arkansas. The rest of the region had adequate to surplus soil moisture. Fieldwork was underway in some areas as preparations for planting gained momentum.

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. No forward contracting was reported. Cotton was being delivered to fulfill contracts. The Omicron variant of 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.

Warm, clear weather prevailed during most of the report period. Around 1 inch of accumulated precipitation was reported throughout the area. The daytime high temperatures ranged from the 50s to the 70s. Overnight low temperatures were in the 20s to 50s. Producers paid close attention to fertilizer needs and application methodologies to ensure good yields with minimum inputs. Industry experts indicated that many producers were considering alternative crops instead of corn, including soybeans and cotton.

Inflation continued to pressure all aspects of the economy. Virtual and in-person industry meetings were planned and attended. According to the U.S. Drought Monitor, severely deficient soil moisture persisted throughout the state of Louisiana, with the cotton-producing northeastern region experiencing isolated areas of extreme drought. Abnormally dry to moderate drought conditions were widespread throughout Mississippi.

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 active. Supplies and producer offerings were moderate. Demand was good. Average local spot prices were lower. Producer interest in forward contracting was heavy. Trading of CCC-loan equities was slow. Foreign mill inquiries were light to moderate. Interest was best from China, Pakistan, and Vietnam. The COVID-19 Pandemic continued to place pressure on shipping logistics and slowed global economic recovery.

Daytime temperatures were in the low 60s to low 80s, with overnight lows in the 30s to 60s. A little over one-half of an inch of rain was received in the Rio Grande Valley (RGV) early in the period. Sufficient moisture was received and fields were ready to plant in the Blackland Prairies. Corn was planted in the Coastal Bend. Corn and sorghum were planted in the RGV. Some producers opted to wait until precipitation was received to initiate planting activities.

Fieldwork was active in the Upper Coast ahead of grain sowing. Cotton will be planted after the grain crops are in the ground. Cotton acreage received fertilizer applications ahead of planting. Most producers will wait until after the next couple of cold fronts and expand corn planting next week. Cotton will be planted early to mid-April depending on weather forecasts. Cotton planting seed was booked and ready for delivery. Some acres were expected to move from corn to cotton.

Daytime temperature highs in Kansas were in the mid-30s to upper 60s, and Oklahoma temperature highs were in the low 40s to upper 70s. Overnight lows were in the teens to 50s. Gusty winds interrupted fieldwork and a cold front brought wintry precipitation and blustery conditions on February 17. Ginning was completed during the reporting period in Kansas, but will continue until March in Oklahoma.

West Texas

Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was good. 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 to moderate. Interest was best from China, Pakistan, and Vietnam. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. Global economic recovery was slow.

Windy, sunny conditions caused a high risk for fire hazards until a cold front moved into the region on February 17 that brought a light wintry mix to some locations in the Panhandle. Daytime temperatures were in the low 30s to mid-70s, and overnight lows were in the 20s to mid-30s. Fieldwork was stalled because of wind gusts and blowing dirt. Field conditions were critically dry, and a slow soaking rain event is needed to recharge wells and improve topsoil and subsoil levels ahead of planting.

Meetings were attended in person and virtually. Several gins completed the season, but some were expected to offer pressing services into March. Sample receipts received by the classing offices have decreased in volume.

Trading

East Texas

  • In Kansas, a lot containing a moderate volume of color 31, leaf 3 and 4, staple 34, mike 45-49, strength 28-30, uniformity 80-81, and 75 percent extraneous matter sold for around 116.00 cents, FOB car/truck (compression charges not paid).
  • In Oklahoma, mixed lots containing a light volume of color 41 and better, leaf 2 to 4, staple 35, mike 35-48, strength 28-35, uniformity 79-82, and 75 percent extraneous matter sold for 115.50 to 115.75 cents, same terms as above.
  • A light volume of color 21 to 44, leaf 2 to 6, staple 35 to 37, mike 28-33, strength 28-35, and uniformity 77-80 sold for 117.00 to 118.25 cents, same terms as above.
  • A light volume of CCC-loan equities traded for 57.75 to 61.25 cents.

West Texas

  • Lots containing a heavy volume of color 23 and better, leaf 4 and better, staple 34 and longer, mike 33-47, strength 26-33, uniformity 77-83, and 25 percent extraneous matter sold for 117.75 to 118.00 cents per pound, FOB car/truck (compression charges not paid).
  • Lots containing a heavy volume of color 31 and better, leaf 4 and better, staple 33 to 36, mike 30-46, strength 26-34, and uniformity 77-82 sold for 114.25 to 117.50 cents, same terms as above.
  • A heavy volume of lots containing color 31 and better, leaf 4 and better, staple 34 to 37, mike 33-48, strength 27-35, and uniformity 77-82 sold for 112.00 to 114.00 cents, same terms as above.
  • A moderate volume of CCC-loan equities traded for 61.00 to 62.00 cents.

Western Markets Regional Summary

Desert Southwest (DSW)

Spot cotton trading was inactive. Supplies were light. Demand was moderate. Average local spot prices were lower. Producers inquired for 2022-crop contracts. No sales were reported. Foreign mill inquiries were light. The COVID-19 Pandemic status continues in the U.S. Shipping and supply chain issues persisted.

Temperatures in the high 60s reached the high 70s for central Arizona late in the period. Overnight lows were in the 40s and 50s. Planting is active in Yuma, AZ. Ginning continued in Arizona. Temperatures for New Mexico and El Paso, TX, were in the 60s and 70s. Overnight lows went from the high 20s to low 40s. Producers prepared for spring plantings. The on-going drought will impact 2022 crop acreage.

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 COVID-19 Pandemic status continues in the U.S. and shipping and supply chain issues persisted.

Above-average temperatures continued for most of the week. Temperatures that were at around 10 to 15 degrees higher than normal dropped into the high 50s to low 60s as a storm front moved through. Lack of rainfall intensified drought conditions throughout the Valley. No measurable rain has been received on the Valley floor since December. The on-going drought will impact 2022 crop acreage. Producers prepared fields for planting.

American Pima (AP)

Spot cotton trading was inactive. Supplies were light. Demand was very good. Average local spot prices were steady. Producers made inquiries for new-crop pricing. No new sales were reported. No forward contracting or domestic mill activity was reported. Merchants will begin to open marketing pools in late February or March. Foreign mill inquiries were moderate. Interest was best for prompt shipment. The COVID-19 Pandemic status continues in the U.S. Chronic shipping delays and supply chain disruptions caused headaches for merchants.

Dry conditions persisted for much of the Far West. Daytime temperatures were in the mid-60s to low 80s for the region. The immediate forecast continued to show rain-free conditions. The on-going drought will impact 2022 crop acreage. Planting continued in the Yuma Valley of Arizona. Far West producers prepared fields for planting.

Trading

Desert Southwest

  • No trading activity was reported.

San Joaquin Valley

  • No trading activity was reported.

American Pima

  • No trading activity was reported.

https://agfax.com/2022/02/18/weekly-cotton-market-review-usda-326/ Weekly Cotton Market Review – USDA – AgFax

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