Mp_cn812 July 23, 2021 Weekly Cotton Market Review Average spot quotations were slightly 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 85.10 cents per pound for the week ending Thursday, July 22, 2021. The weekly average was up from 85.02 cents last week and from 58.18 cents reported the corresponding period a year ago. Daily average quotations ranged from a high of 86.59 cents Friday, July 16 to a low of 83.00 cents Monday, July 19. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended July 22 totaled 872 bales. This compares to 3,019 reported last week and 1,894 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 1,386,548 bales compared to 1,596,496 bales the corresponding week a year ago. The ICE October settlement price ended the week at 90.27 cents, compared to 89.84 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 steady. Trading of CCC-loan equities was inactive. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains. Vaccination doses were being distributed at a steady pace. Partly cloudy conditions dominated the weather patter across the lower Southeast during much of the period. Daytime high temperatures were in the mid-80s to low 90s. Widespread thundershowers brought moisture to areas throughout Alabama, the Florida Panhandle, and Georgia. Precipitation totals measured from one and one-half inches to around three inches of weekly accumulated rainfall. In many areas, fields remained too soft to support equipment and fieldwork was interrupted. The application of herbicides and nitrogen was delayed, and the application of growth regulators was also hampered. The crop advanced at a good pace, but nutrient deficiencies were observed in some fields due to excessive wet conditions. Producers would welcome a period of dry and sunny weather to help soft soils to firm and invigorate plants. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released July 19, squaring advanced to 86 percent in Georgia and 75 percent in Alabama; boll-setting advanced to 34 percent in Georgia and 24 percent in Alabama. Sunny to partly cloudy conditions prevailed across the upper Southeast during the period. Daytime high temperatures were in the mid-80s to low 90s. Scattered thundershowers brought widespread moisture to areas throughout the Carolinas and Virginia during the week. Precipitation totals measured from 1 to 3 inches of moisture during the period, with heavier downpours observed along coastal areas. Producers welcomed the wet weather which relieved dry conditions, particularly on dryland fields. Producers applied herbicides and fertilizer as dry conditions allowed. The crop advanced at a good pace. According to NASS, squaring advanced to 75 percent in South Carolina and Virginia, and 69 percent in North Carolina; boll-setting advanced to 36 percent in South Carolina, 22 in Virginia, and 21 percent in North Carolina. Textile Mill Domestic mill buyers booked a moderate volume of 2021-crop cotton, color 41, leaf 4, and staple 34 and longer for January through December 2022 delivery. No additional sales were reported. Yarn demand remained good and mills continued to struggle to meet product demand as labor issues continued to limit production capacity. Personal protective equipment continued to be produced for frontline workers and consumers. Demand through export channels was good. Agents for mills in Turkey purchased mixed lots containing mostly color 41, leaf 4, and staple 37 for January through March 2022 shipment. Representatives for mills in Taiwan inquired for a moderate volume of color 42 and better, leaf 4 and better, and staple 34 and longer for August shipment. Peruvian mill buyers inquired for a moderate volume of color 31, leaf 3, and staple 37 for October/November shipment. Trading • No trading activity was reported. 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 steady. 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. Cloudy to partly cloudy conditions, with light but frequent rain showers, dominated the weather pattern during the week. Daytime highs in the 80s were unseasonably cool by a few degrees compared to the average for this time of the year. Overnight temperatures were in the 70s. Over 1 inch of precipitation was reported in most parts of the region, and soil moisture was generally adequate. Producers were hoping for more sunshine to promote normal crop development as boll-setting gained momentum throughout the Memphis territory. Producers were struggling with weed control in areas that have received excessive moisture. Soft soils prevented timely applications of herbicides, and frequent rain showers have hindered effectiveness of chemicals in fields that were treated. Insect pressure from plant bugs varied from light to heavy throughout the region. Fields were treated as necessary to control infestations. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on July 19, squaring had reached 93 percent in Arkansas, 99 in Missouri, and 71 percent in Tennessee. NASS reported that boll-setting had advanced to 56 percent in Arkansas, 38 in Missouri, and 19 percent in Tennessee. South Delta Spot cotton trading was inactive. Supplies of available cotton and demand were light. Average local spot prices were steady. Trading of CCC-loan equities was inactive. No forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy. Cloudy and wet conditions prevailed during the week. Daytime highs dipped into the 80s on several occasions during the week, which was unseasonably cool compared to historical averages. Overnight temperatures were in the 70s. Nearly 3 inches of precipitation was reported in most parts of the region, and soils were saturated. Some low-lying fields were flooded. The crop requires a period of dry weather and more sunshine to promote normal plant development. Boll-setting expanded throughout the region. Insect pressure from plant bugs intensified in many fields as inclement weather hindered timely application of control measures. Some producers remained concerned about the high cost of multiple applications of crop protection chemicals. The crop continued to lag at least one week behind average development for this time of the season. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on July 19, squaring advanced to 93 percent in Louisiana and 74 percent in Mississippi. NASS reported that boll-setting had advanced to 58 percent in Louisiana and 31 percent in 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 slow. Supplies and producer offerings were light. Demand was good. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light to moderate for new crop. Interest was best from India, Mexico, and Pakistan. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. No cost vaccinations continued to be offered for citizens ages 12 and over. Concerns increased from recent Delta variant outbreaks. The Lambda variant was reported in south Texas. Hospitalization rates increased. Stands progressed in the Coastal Bend and Upper Coast. Daytime temperature highs were in the 80s to 90s. Rain showers brought additional moisture to soggy fields. The first bale of the season was harvested in the Coastal Bend. Ginning had not begun. Producers were encouraged with yield potential around 3 bales per acre at some locations. Stands experienced fruit shed during recent heavy thunderstorms and field flooding. Plant growth regulators and insecticides were applied aerially. A period of dry weather is needed for grain harvest. Fields remained soft from additional precipitation received in the Rio Grande Valley. More rainfall is in the weekend forecast. Texas A&M extension specialists reported increased populations of whiteflies. Producers prepared harvesting equipment and prepared to apply boll openers and defoliants. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on July 19, squaring in Texas was at 62 percent, compared to 67 last year and near the five-year average of 68 percent. Setting bolls was 17 percent compared to 20 last year and lagging behind the 21 percent five-year average. Fields in the southern Blackland Prairies were in mid-bloom and producers were encouraged. Soils were mushy from recent rainfall and fieldwork was limited. Dryer conditions prevailed in the Brazos River Bottoms. In Kansas, stands advanced and were at early to mid-square. Several applications of plant growth regulators, herbicides, and insecticides were applied. Squaring was 79 percent, ahead of 74 last year, and ahead of the 56 percent five-year average, according to NASS. Setting bolls was at 9 percent, behind 16 last year, but slightly ahead of the 7 percent five-year average. Scattered showers brought beneficial precipitation to some fields. In Oklahoma, 50 percent had squared, near 47 last year, and ahead of 55 percent for the five-year average. Setting bolls was at 10 percent compared to 9 last year and the 14 percent five-year average, according to NASS. West Texas Spot cotton trading was slow. Supplies and producer offerings were light. Demand was good. Average local spot prices were steady. No forward contracting or domestic mill activity was reported. Trading of CCC-loan equities was inactive. Foreign mill inquiries were light to moderate for new crop. Interest was best from India, Mexico, and Pakistan. The COVID-19 Pandemic continued to place pressure on commodity markets and shipping logistics. No cost vaccinations continued to be offered for citizens ages 12 and older. The highest number of new cases since February have been reported in Lubbock County. Lives lost from the COVID-19 virus continued. Precipitation was received in the High Plains with below average daytime temperature highs in the upper 80s to low 90s. Skies were hazy from the western wildfires. The most mature stands began to bloom, and the crop continued two to three weeks behind schedule. Lots of stands have matchhead squares. Stands were in varying phases of maturity. The growing season has been challenging and weed pressure is great. Producers cultivated fields and applied herbicides, which were difficult to find. Hoe crews were in the fields removing weeds that were in the rows. Producers monitored fields for insect pressure. Trading East Texas • In Texas, a light volume of mostly color 31, leaf 3 and 4, staple 36-38, mike 43-47, strength averaging 31.5, and uniformity averaging 81.4 sold for around 85.75 cents per pound, FOB warehouse (compression charges not paid). West Texas • A light volume containing mostly color 31 and 32, leaf 3 and 4, staple 34 and longer, mike 37-42, strength 26-30, and uniformity 78-82 sold for around 88.00 cents per pound, FOB car/truck (compression charges not paid). • A light volume mixed lot containing color 24 and better, leaf 4 and better, staple 34 and longer, mike 38-50, strength 25-33, uniformity 75-81, and 25 percent extraneous matter sold for around 80.00 cents, same terms as above. • A light volume containing mostly color 44 and better, leaf 1-5, staple 34 and longer, mike 34-51, strength 28-32, uniformity 78-81, and 25 percent extraneous matter sold for around 75.50 cents, same terms as above. Western Markets Regional Summary Desert Southwest (DSW) Spot cotton trading was inactive. Supplies and demand were light. Average local prices were steady. No domestic mill activity was reported. Foreign mill inquiries were moderate and mostly for the purpose of available supplies of 2020-crop and for 2021-crop price discovery. Interest was best from Turkey. The COVID-19 virus Delta variant cases increased throughout the region. Some cities were re-instituting the mask mandates. Daytime high temperatures were in the low to mid-100s in central Arizona. A flash flood warning was in effect starting Thursday afternoon, July 22 through Saturday, July 24. Last irrigations were applied on the Yuma crop. Boll-setting was good, and producers expected fields to yield around 3 bales per acre. The crop made good progress in central Arizona and the Safford Valley. Temperatures were in the 90s for southern New Mexico and El Paso, TX. A strong thunderstorm brought over 2 inches of rainfall mostly in El Paso and west of the city. Low-lying areas were flooded. Many arroyos, washes, and rivers had water. Light moisture was received in the Tornillo area. The crop made good progress. Whitefly pressure was reported, but easily controlled. San Joaquin Valley (SJV) Spot cotton trading was inactive. Supplies and demand were light. Average local prices were steady. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were moderate and mostly for the purpose of available supplies of 2020-crop and for 2021-crop price discovery. The Delta variant of the COVID-19 virus cases increased in California. Some cities revived mask mandates. Daytime high temperatures were in the low to mid-100s. Cloudy and humid conditions were prevalent in the week as higher elevations experienced monsoonal activity. No rainfall was recorded on the Valley floor. The crop made good progress. Some shedding of bolls was reported weeks after the intense temperatures. The crop reached peak bloom. Industry members attended annual meetings. American Pima (AP) Spot cotton trading was inactive. Supplies of 2020-crop were light. Demand was very good. Average local prices were steady. No forward contracting was reported. Foreign mill inquiries were moderate. Shipper prices remained firm for 2020 and 2021-crop. No new-crop sales were reported. The COVID-19 Delta variant in key cotton foreign ports and the U.S. remains a concern. Work arounds on shipping cotton is a daily occurrence. Mostly hot and dry conditions continued in the Far West. The higher elevations of the Sierra Nevada Mountain range and the Desert Southwest (DSW) received monsoon activity in the period. Flooding was reported in low-lying areas of El Paso, TX. The DSW region remains on alert as strong thunderstorms continued in the near-term forecast. No rainfall was recorded in the San Joaquin Valley (SJV) of California. Little to no insect pressure was reported in the region. The Yuma, AZ crop was approaching cut-out stage. Crop progress was good in central Arizona and the Safford Valley. Blooming continued and bolls were forming. The SJV crop reached peak bloom. Industry members attended annual meetings. Trading Desert Southwest • A moderate volume of 2021-crop Arizona cotton for contract base quality color 31, leaf 3, and staple 36 was forward contracted at around even on ICE December futures. The contracts were subject to government discounts. San Joaquin Valley • No trading activity was reported. American Pima • No trading activity was reported. USDA ANNOUNCES SPECIAL IMPORT QUOTA #14 FOR UPLAND COTTON July 22, 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 July 29, 2021, allowing importation of 11,607,075 kilograms (53,310 bales of 480-lbs) of upland cotton. Quota number 14 will be established as of July 29, 2021 and will apply to upland cotton purchased not later than October 26, 2021 and entered into the U.S. not later than January 24, 2022. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period March 2021 through May 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.