Weekly Cotton Market Review Mp_cn812 Vol. 102 No. 45 June 18, 2021 Average spot quotations were 39 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 81.29 cents per pound for the week ending Thursday, June 17, 2021. The weekly average was down from 81.68 cents last week, but up from 55.50 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 82.82 cents Friday, June 11 to a low of 80.62 cents Thursday, June 17. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended June 17 totaled 10,122 bales. This compares to 1,751 reported last week and 6,220 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,374,421 bales compared to 1,541,371 bales the corresponding week a year ago. The ICE October settlement price ended the week at 84.73 cents, compared to 89.26 cents last week. Southeastern Markets Regional Summary Spot cotton trading was inactive. Supplies and producer offerings were light. Demand was light. Average local spot prices were weak. Trading of CCC-loan equities was slow. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains. Ocean freight rates increased and container space was scarce. Vaccination doses were being distributed at a slower pace than in previous weeks. Cloudy to partly sunny conditions prevailed over much of the lower Southeast during the period. Seasonably warm daytime high temperatures were in the low 90s. Widespread afternoon showers throughout the region early in the week brought varying amounts of moisture with some pockets of heavy rainfall. Weekly accumulated precipitation totals measured around 2 inches in Alabama, while the Florida Panhandle and south central Georgia received slightly less. Producers welcomed the rainfall, particularly on dryland fields that were planted in dry soil conditions. The beneficial moisture improved dry conditions and invigorated young plants. Squaring was underway in the earliest planted fields. Crop advisors were carefully monitoring nitrogen levels to determine the level of side-dressed fertilizer applications necessary for good crop development. Pressure from thrips continued to build in some locales in late-planted fields and producers applied sprays to control infestations. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released June 14, squaring advanced to 5 percent completed in Alabama and 20 percent completed in Georgia. Partly cloudy to clear conditions were observed across the upper Southeast during the period. Daytime temperatures were in the mid-80s to the low 90s. Scattered shower activity brought light moisture to some areas in the Carolinas and Virginia. Weekly accumulated precipitation totals measured from trace amounts up to 1 inch. Additional moisture would promote normal crop development and improve droughty conditions. Planting was completed and other fieldwork progressed as conditions required. Producers were actively scouting fields for insect pests and treating as necessary to control infestations. Producers applied fertilizer and herbicides in some areas. According to NASS, squaring advanced to 4 percent completed in North Carolina, 14 in Virginia, and 10 percent completed in South Carolina. Textile Mill Domestic mill buyers inquired for a light volume of 2021-crop cotton, color 51 and better, leaf 4 and better, and staple 34 and longer for November through October 2022 delivery. No sales were reported. Yarn demand remained good; but mills were forced to operate below capacity due to on going labor personnel shortages. Personal protective equipment continued to be produced for frontline workers and consumers. Demand through export channels was light. Agents throughout the Far East inquired for any discounted styles of cotton. No sales were reported. Cotton shippers reported that ocean freight rates were increasing every two weeks and that container space was difficult to obtain. Trading • A heavy volume of CCC-loan equities traded for around 34.50 cents per pound. 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 weak. 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. The rate of vaccinations has slowed in many states, due to consumer concerns about possible side effects from the vaccines. Mostly clear, hot conditions characterized the weather during the week. Daytime highs were in the 90s. Overnight temperatures in northern areas were in the 60s, and in the 70s elsewhere. Up to 2 inches of rain was reported generally, and soil conditions remained soggy in the hardest hit places. Fieldwork progressed during the week under favorable weather conditions in most areas. Producers applied fertilizers and other soil amendments to promote normal plant development. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on June 14, squaring was underway at 3 percent in Arkansas, 17 in Missouri, and 19 percent in Tennessee. NASS also reported the condition of the crop overall was fair to good. Insect pressure from thrips was heavy in many areas in late planted fields and producers struggled in some of the wetter areas to achieve effective control. South Delta Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were weak. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy. The rate of vaccinations has slowed in many states, due to consumer concerns about possible side effects from the vaccines. Mostly cloudy weather prevailed throughout the region. Afternoon thunderstorm systems brought up to 2 inches of rain to some places. Daytime highs were in the 90s. Overnight temperatures were in the 70s. Fieldwork was delayed in areas where soils were too soft to support equipment. Producers in several parishes of Louisiana reported that excess moisture was a major problem. Fields in low-lying areas remained flooded as persistent rainfall kept river levels near or above flood stage. More rainfall was in the nearby forecast. Pressure from weeds increased in wet fields. Insect pressure from thrips was reported in late-planted fields. Treatments were made as necessary to control heavy infestations. Seedling development ranged from true leaf to squaring in most areas. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on June 14, squaring surged to 22 percent in Louisiana and was underway at 2 percent in Mississippi. The condition of the planted acreage was rated as mostly good in both states. 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 light. Average local spot prices were weak. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was slow. Foreign mill inquiries were moderate for new crop. Interest was best from China, Korea, and Pakistan. The COVID-19 pandemic continued to put pressure on commodity markets and shipping logistics. Fields began to firm following recent rainfall in the Rio Grande Valley, with daytime temperatures in the low 80s to mid-90s. Some stands were lost to flooding and will be turned over for insurance adjustments, but many fields dried enough to support equipment. Producers were able to resume weed control. Fields were in full bloom. The Cotton and Grain Field Day was hosted by Texas A&M AgriLife Extension on June 16 in Lyford, Texas. Herbicides and insecticides were applied in south Texas where fields had firmed. Rainfall delayed fieldwork in the Upper Coast and Coastal Bend. In the Blackland Prairies, weeds were problematic following recent rainfall. Applications were made to control aphid and fleahopper populations. Stands were squaring and some fields started to bloom in the southern counties. In Kansas and Oklahoma, the crop progressed with daytime temperature in the mid-to-upper 90s. Some stands will be failed because of the damage caused by the rainy, cool weather events at the end of May. Thrips have subsided with wheat harvest expanding in nearby fields. Treatments were applied to control fleahoppers. West Texas Spot cotton trading was slow. Supplies and producer offerings were light. Demand was light. Average local spot prices were weak. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive. Merchants purchased a light volume of cotton forfeited to the CCC-catalog. Foreign mill inquiries were moderate for new crop. Interest was best from China, Korea, and Pakistan. The COVID-19 pandemic continued to place pressure on commodity markets and shipping logistics. Heat units increased and dried soggy soils with daytime temperatures in the upper 90s to low 100s. Record setting temperatures were reached that helped germination and advance stands. Cotton responded positively to drier conditions. Crusting was problematic for some seedlings to push through the topsoil. Replanting was underway. Stages varied from germination up to 5 true leaves. Other fields will be planted with alternative crops since the cotton planting deadlines passed for some areas. Attention was placed on managing weeds and insects. Association, industry, and gin meetings were held. Trading East Texas • In Kansas, a light volume lot containing mostly color 43, leaf 4-6, staple 34, mike 36-39, strength 25-28, uniformity 80-82, and 100 percent extraneous matter sold for around 68.25 cents per pound, FOB car/truck (compression charges not paid). • In Oklahoma, a light volume of mostly color 41, leaf 5 and 6, staple 36 and 37, mike averaging 30.1, strength 31-34, uniformity 79-83, and 100 percent extraneous matter sold for around 71.00 cents, same terms as above. • A light volume of CCC-loan equities traded for around -2.25 cents. West Texas • A light volume of color 11 and 21, leaf 1 and 2, staple 36 and longer, mike 30-49, strength 26-32, and uniformity 77-82 sold for around 84.50 cents per pound, FOB car/truck (compression charges not paid). • A light volume of color 33, leaf 5, staple 35 and 36, mike 34-39, strength 28-31, uniformity 79-82, and 75 percent extraneous matter sold for around 70.00 cents, same terms as above. • A light volume of 2019-crop CCC-catalog cotton, color 31 and 32, leaf 2 and 3, staple 32 and 33, mike averaging 44.9, strength averaging 27.1, and uniformity averaging 78.1 sold for 65.65 cents per pound, FOB warehouse (In-charges and storage pre-paid, compression not paid). Western Markets Regional Summary Desert Southwest (DSW) Spot cotton trading was inactive. Supplies and demand were light. Average local prices were weak. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Different variants of the COVID-19 virus worldwide slowed economic progress. In the U.S., various stimulus programs increased consumer spending. Hot, dry conditions continued for the region. Excessive heat warnings and air quality alerts are in effect as high pressure brought dangerous heat. Daytime high temperatures were in the mid-to-high 110s in Arizona. Producers irrigated the crop to help alleviate heat stress. Sources reported the crop was doing well if water was plentiful. Local sources in New Mexico and El Paso, Texas reported in some areas the crop was struggling. Well water was pumped to supply irrigation needs if available. San Joaquin Valley (SJV) Spot cotton trading was inactive. Supplies and demand were light. Average local prices were weak. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Different variants of the COVID-19 virus worldwide slowed economic progress. Various government stimulus programs boosted states’ economic recovery efforts. Temperatures were mostly in the 90s, but a high pressure system pushed temperatures into the high 100s late in the period. Excessive heat warnings were in effect. Producers managed the crop with irrigation. No insect activity was reported. The crop made progress. American Pima (AP) Spot cotton trading was inactive. Supplies of 2020 crop were tight. Demand of 2020-crop was good. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate. West coast port congestion and COVID-19 variants in key cotton foreign ports remains a concern. Temperatures were in the 70s to low 100s for the Far West (FW). Drought conditions intensified. Reservoirs are below capacity throughout the region. FW producers continued with irrigation schedules. Overall, the crop made progress. Trading Desert Southwest • No trading activity was reported. San Joaquin Valley • No trading activity was reported. American Pima • No trading activity was reported. Cotton and Wool Outlook The following information was excerpted from the Cotton and Wool Outlook report, released on June 14, 2021 The latest U.S. Department of Agriculture (USDA) cotton projections for 2021/22 (August-July) indicate a decrease in global cotton ending stocks as mill use exceeds production for the second consecutive season. World stocks are projected at 89.3 million bales at the end of 2021/22, the lowest in 3 years (figure 1). Led by China, the stock decline is tempered somewhat by a projected increase for Brazil. China is forecast to account for 40 percent of the 2021/22 global cotton stock total, while India and Brazil contribute an additional 18 percent and 14 percent, respectively. The United States is expected to hold only 3 percent of the global stock total. Global cotton production is forecast 5 percent higher at 118.9 million bales in 2021/22, the result of increased area. World cotton mill use is projected to rise nearly 4 percent to 122.5 million bales as the global economy expands. Consequently, 2021/22 world cotton trade is expected to remain at one of its highest levels on record, with the United States and Brazil the largest exporters. Along with lower stocks, a rising cotton demand is expected to keep 2021/22 world cotton prices above recent levels. USDA ANNOUNCES SPECIAL IMPORT QUOTA #9 FOR UPLAND COTTON June 17, 2021 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 June 24, 2021, allowing importation of 10,452,580 kilograms (48,008 bales of 480-lbs) of upland cotton. Quota number 9 will be established as of June 24, 2021 and will apply to upland cotton purchased not later than September 21, 2021 and entered into the U.S. not later than December 20, 2021. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period February 2021 through April 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.