Weekly Cotton Market Review March 11, 2022 Mp_cn206 Southeastern Markets Regional Summary Spot quotations averaged 264 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 114.99 cents per pound for the week ending Thursday, March 10, 2022. The weekly average was down from 117.63 cents last week, but up from 81.96 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 114.28 cents Friday, March 4 to a high of 115.83 cents Tuesday, March 8. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended March 10 totaled 12,654 bales. This compares to 42,526 reported last week and 30,780 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,472,006 bales compared to 1,290,080 bales the corresponding week a year ago. The ICE May settlement price ended the week at 116.86 cents, compared to 119.80 cents last week. Spot cotton trading was moderate. Supplies were light. Demand was moderate. Producer offerings were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. The COVID-19 Pandemic continues to disrupt labor availability and logistics. Mostly cloudy to overcast conditions prevailed across the lower southeast during the period. Daytime high temperatures in the 80s cooled into the 70s late in the week. A system of storms brought blustery conditions and rainfall to areas of the lower southeast. Areas throughout Alabama and the Florida Panhandle received one-half of an inch to two inches of moisture, with some locally heavier downpours observed. Two EF1 tornadoes were reported in south Alabama. Portions of south and coastal Georgia received around one-quarter of an inch to one inch of rainfall. The moisture was welcome as abnormally dry to moderate drought conditions had expanded throughout the region, according to the U.S. Drought Monitor. The wet weather interrupted fieldwork and outside activities. Partly sunny to mostly cloudy conditions prevailed across the upper southeast during the period. Daytime high temperatures in the 70s and 80s dropped into the 50s late week as a cold front moved across the region. Scattered showers brought light moisture to pockets of the Carolinas and Virginia, but mostly dry conditions were observed. Abnormally dry to moderate drought conditions expanded throughout the region, according to the U.S. Drought Monitor. Fieldwork and outside activities advanced as producers prepared fields for spring planting. Textile Mill Domestic mill buyers inquired for a moderate volume color 41, leaf 3 and 4, and staple 34 and longer for November/December delivery. No sales were reported. No additional inquiries were reported. 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. Agents throughout the Far East inquired for any discounted styles of cotton. Trading • A heavy volume mixed lot containing color mostly 31 and 41, leaf 3 and 4, staple 35 and longer, mike 43-49, strength 30-34, and uniformity 80-83 sold for around 122.50 cents per pound, FOB car/truck (Rule 5, compression charges paid). • A heavy volume of color mostly 31 and 41, leaf 2-4, staple 35 and longer, mike 37-49, strength 27-30, and uniformity 79-81 sold for around 123.00 cents per pound, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage). • A light volume of color 51 and 52, leaf 3 and 4, staple 34-37, mike 37-42, strength 24-27, and uniformity 80-82 sold for around 107.00 cents per pound, 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. The weather was seasonably cool during most of the report period. Daytime high temperatures dipped into the 50s and 60s. Overnight low temperatures were in the 30s. A storm front mid-week brought up to one inch of rain throughout the region; river flood advisories remained in effect in low-lying areas along rivers and streams throughout the region. Virtual and in-person industry meetings were being planned and attended. According to the U.S. Drought Monitor, drought conditions did not improve in the southern part of Arkansas due to continued lack of rain in that area, attributed to the La Niña climatic condition. The rest of the region had adequate to surplus soil moisture. Some field work and burndown were completed in preparation for planting. Producers were alarmed at the rapid increase in the cost of fuel, due to political tension in Europe and Asia which created turmoil in the markets. 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 Covid-19 virus continues to cause major disruptions to our society in general, as well as international supply chains and the worldwide labor force. Spring-type weather prevailed during most of the report period. Daytime high temperatures dropped into the 60s, with overcast skies. Overnight low temperatures were in the 30s and 40s. A series of thundershowers moved through the territory, but most areas recorded less than one inch of rain. River flood advisories were in effect throughout the region as the Mississippi River continued to rise due to continued rains upstream. Virtual and in-person industry meetings were being planned and attended. According to the U.S. Drought Monitor, due to continued lack of rain attributed to the La Niña climatic condition, severe drought expanded in parts of Louisiana. Abnormally dry to moderate drought conditions were widespread throughout Mississippi. Fieldwork and burndown were completed in many areas. Political tension in Europe and Asia caused the price of fuel to rise sharply, causing concern as producers prepared for spring planting. 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 light. Demand was good. Average local spot prices were lower. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light. The COVID-19 Pandemic continued to place pressure on shipping logistics and slowed global economic recovery. A light amount of rainfall was received in the Upper Coast and Coastal Bend with daytime temperatures in the mid-40s to mid-80s. Additional rainfall is in the nearby forecast. Planting gained momentum in the Upper Coast and Coastal Bend. Planting continued in the Rio Grande Valley. Meetings were attended. In Kansas, blustery, cold conditions prevailed with daytime temperature highs in the upper 20s to mid-70s, and overnight lows in the teens to low 50s. Less than three-fourths of an inch of wintry precipitation was received that interrupted fieldwork. Ginning was completed for the season. Producers planned for the 2022-cotton season and considered marketing options. Grain prices enticed some producers to contemplate planting alternative crops. Industry meetings were hosted and well attended. Trace amounts of wintry precipitation were received in parts of Oklahoma with temperature highs in the low 30s to low 80s. Overnight lows were in the 20s to 50s. Ginning was almost done. Fieldwork was minimal. Concerns increased regarding a lack of irrigation allocations, fuel, and fertilizer costs that have begun to influence planting intentions. Precipitation is needed to ease droughty conditions. West Texas Spot cotton trading was active. Supplies and produer offerings were moderate. 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. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. Global economic recovery was slow. Less than five gins continued ginning for customers as the 2021-crop year nears the end. Fieldwork was limited. Producers made plans for the upcoming season and carefully considered commodity prices and input expenditures including fertilizer, fuel, and irrigation water. Sunny, windy conditions persisted with daytime temperatures in the low 40s to low 80, and overnight lows in the teens to low 50s. Gusty winds kicked-up dirt in the atmosphere. A slow soaking rain is needed to recharge water supplies. Meetings were attended. Trading East Texas • In Kansas, a light volume of color 13 and better, leaf 2 to 6, staple 36, mike 26-42, strength 27-33, uniformity 78-80, and 75 percent extraneous matter sold for around 104.75 cents per pound, FOB car/truck (compression charges not paid). • In Oklahoma, a mixed lot containing a moderate volume of color 22 and better, leaf 3 and better, staple 35, mike 30-48, strength 28-33, uniformity 78-81, and 75 percent extraneous matter sold for around 111.25 cents, same terms as above. Trading West Texas • Lots containing a heavy volume of color 31 and better, leaf 2 and better, staple 35 and longer, mike 38-46, strength 27-31, and uniformity 80-83 sold for 114.00 to 117.00 cents per pound, FOB car/truck (compression charges not paid). • A heavy volume of lots containing color 32 and better, leaf 3 and better, staple 32 and 33, mike 30-48, strength 25-32, and uniformity 75-82 sold for 109.00 to 110.00 cents, same terms as above. • A moderate volume of CCC-loan equities traded for 54.75 to 57.25 cents. Far West 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 COVID-19 Pandemic status continues in the U.S., but many restrictions were eased. Shipping and supply chain issues persisted. Partly sunny conditions with temperatures in the high 60s and 70s were recorded in central Arizona. Scattered showers deposited little moisture early in the period. Late week, red flag warnings were in effect for eastern Arizona counties. Strong winds increased chances of fire danger. Planting continued in Yuma, Arizona. Ginning was completed. Fieldwork was active. 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. Although many restrictions were eased in dealing with the COVID-19 Pandemic in the U.S., disruptions continued in local and foreign logistics as well as labor availability. Partly cloudy conditions were the norm, with temperatures in the 70s. Welcomed rainfall was received in the Valley early in the reporting period. Up to one-half of an inch was received. Fields were ready for planting. 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. Current crop inventories are low, and many producers felt demand and prices will continue strong into 2022 crop. Foreign mill inquiries were light. According to the Foreign Agricultural Service’s U.S. Export Sales report 415,600 bales of Pima cotton were committed for export for the week ending March 3. The COVID-19 Pandemic status continues in the U.S. as well as chronic shipping delays and supply chain issues. The San Joaquin Valley of California received around one-half of an inch of rainfall early in the reporting period. Dry conditions persisted for much of the Far West. Daytime temperatures were in the mid-60s to 80s for the region. Planting was completed in Yuma, Arizona. Trading Desert Southwest • No trading activity was reported. San Joaquin Valley • No trading activity was reported. American Pima • No trading activity was reported. Cotton & Wool The following information was excerpted from the Cotton and Wool report, released on March 11, 2022 U.S. cotton production in 2021/22 remains estimated at 1 7.6 million bales (upland at approximately 17.25 million bales and extra-long staple at 367,000 bales). The latest estimate is nearly 21 percent above the 2020 crop but equal to the 3-year average. USDA will release the final U.S. cotton production estimates for the 2021 crop on May 12. Based on the current production estimate and beginning stocks of 3.15 million bales, the 2021/22 cotton supply totals nearly 20.8 million bales, about 1.1 million below last season and the lowest since 2015/16. Supply & Demand The following information was excerpted from the World Agricultural Supply Demand Estimates, released on March 9, 2022 This month’s 2021/22 U.S. cotton supply and demand forecasts are unchanged relative to last month. The projected marketing year average price received by upland producers is also unchanged, at 90 cents per pound. In the world 2021/22 cotton balance sheet, ending stocks are 1.7 million bales lower than a month earlier. A 300,000-bale decrease in production accounts for some of this change, but most of the decline stems from lower beginning stocks, reflecting updated Indian consumption estimates for 2019/20 and 2020/21 to reflect Indian government sources. Projected world 2021/22 consumption is marginally higher this month, up 111,000 bales, but with a 1-million-bale increase in the 2020/21 global estimate, March’s projected consumption growth rate is lower this month. World consumption is now expected to grow 2.1 percent from a year earlier, below the 2.8 percent rate forecast in February. Production is projected lower as a 500,000-bale reduction in India’s crop more than offsets a 150,000-bale increase for Mexico. USDA ANNOUNCES SPECIAL IMPORT QUOTA #21 FOR UPLAND COTTON March 10, 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 March 17, 2022, allowing importation of 10,140,031 kilograms (46,572 bales of 480-lbs) of upland cotton. Quota number 21 will be established as of March 17, 2022 and will apply to upland cotton purchased not later than June 14, 2022 and entered into the U.S. not later than September 12, 2022. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period November 2021 through January 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.