Mp_cn812 November 6, 2020 Weekly Cotton Market Review Average spot quotations were 117 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 65.02 cents per pound for the week ending Thursday, November 5, 2020. The weekly average was down from 66.19 last week, but up from 61.09 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 64.02 cents Monday, November 2 to a high of 65.67 cents Tuesday, November 3. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended November 5 totaled 16,224 bales. This compares to 17,291 reported last week and 22,261 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 317,261 bales compared to 301,037 bales the corresponding week a year ago. The ICE Dec settlement price ended the week at 70.07 cents, compared to 69.82 cents last week. 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 negatively affect cotton demand and disrupt supply chains. Clear to partly cloudy conditions prevailed across the lower Southeast during the period. Daytime high temperatures varied from the low 60s to high 70s. Later in the week, harvesting resumed in Alabama following the passage of Hurricane Zeta as dry conditions prevailed and soils firmed enough to support equipment. Local experts and producers continued to assess the damage; in the more affected areas cotton was blown down and lint was knocked out of bolls. Tarps were blown off modules and some areas remained without power until the first part of the week. In Georgia and the Florida Panhandle, defoliation and harvesting advanced. Boll-rot and reduced quality continued to be observed in areas across the region that have received extensive moisture. Fieldwork advanced at a good pace as producers attempted to get as much cotton off of the stalk ahead of possible wet weather forecast for the weekend. Ginning continued uninterrupted. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released November 2, cotton harvested had reached 40 percent in Alabama and 39 percent in Georgia. Remnants of Hurricane Zeta brought high winds and several inches of rain to portions of northern South Carolina and areas across North Carolina and Virginia over the weekend. In areas that received the most moisture, wet conditions interrupted fieldwork and activities. Daytime high temperatures varied from the mid-50s to the low 70s. Sunny and dry conditions later during the week helped soft soils to firm and defoliation and harvesting resumed at a rapid pace. In the Carolinas, backlogs of modules were accumulating on gin yards and ginning was expanding; ginning was just getting underway in Virginia. According to the NASS Crop Progress report released November 2, cotton harvested had reached 35 percent in North Carolina, 24 in Virginia, and 23 percent in South Carolina. Textile Mill Buyers for domestic mills inquired for a moderate volume of color 31 and 41, leaf 4, and staple 36 for first quarter through third quarter 2021 delivery. No sales were reported. Reports indicated that mills continued to incrementally increase operating schedules as warranted by finished product demand and as allowed by adequate staffing levels. Additional inquiries from domestic mill buyers were light. Mills continued to produce personal protective equipment for frontline workers and military supplies. Demand through export channels was light. Agents throughout the Far East inquired for any discounted styles of cotton. Trading • A heavy volume of color 31, leaf 3 and 4, staple 36-39, mike 37-49, strength 30-32, and uniformity 80-83 sold for around 450 points on ICE December futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage). • A light volume of color mostly 41 and 51, leaf 3 and 4, staple 38 and 39, mike 43-49, strength 29-32, and uniformity 81-82 sold for around 125 points off ICE December futures, same terms as above. • A heavy volume mixed lot containing color mostly 41-52, leaf 3-5, staple 37-39, mike 43-49, strength 27-29, uniformity 79-82, and containing approximately 25 percent level 1 seed coat fragments, sold for around 625 points off ICE December futures, same terms as above. • A light volume of mostly color 31 and 41, leaf 3 and 4, staple 38 and 39, mike 43-49, strength 30-32, and uniformity 81-83 sold for around 100 points on ICE December futures, FOB car/truck (Rule 5, compression charges paid). South Central Markets Regional Summary North Delta Spot cotton trading was slow. Supplies of available cotton and demand were light. Average local spot prices were lower. Trading of CCC-loan equities was inactive. A light volume of forward contracting was reported. The COVID-19 Pandemic continues to negatively impact the overall global economy. Warm daytime temperatures prevailed during the week. Highs were in the 60s and 70s. Overnight lows were in the 30s and 40s as a cold front pushed in behind the warm, moist airflow from the Gulf of Mexico that brought excessive rain last week. Most areas experienced harvesting delays while producers waited for soft soils to firm sufficiently to support heavy equipment. Several gins reported delays due to saturated soils and flooded roads, which made it hard to move modules from fields to gin yards. Producers with cotton still in the field were concerned about the potential deterioration of quality, especially leaf and color grades, as the direct result of excessive moisture. Some producers reported yields that were lower than expected, but still about average. According to the National Agricultural Statistics Service’s Crop Progress report released on November 2, cotton harvested had reached 75 percent completed in Arkansas, 32 in Missouri, and 52 percent in Tennessee. These figures were about one week behind the five-year average in Arkansas and Tennessee, but well behind average in Missouri. 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. A light volume of forward contracting was reported. The COVID-19 Pandemic continues to negatively impact economic activity around the world. Producers were still coping with the effects of Tropical Storm Zeta, which brought excessive moisture to the region last week. Warm daytime high temperatures were in the 60s and 70s. Overnight lows were in the 30s and 40s as a cold front moved through the region behind the warm, moist airflow from the Gulf of Mexico. Fields have been slow to dry, and all field activities were delayed as a result of saturated soils and flooding. Producers with unharvested cotton were hoping for a period of dry, warm weather so they could finish harvesting the crop. Producers with unharvested cotton had to contend with regrowth, which has occurred since fields were first defoliated due to excessive moisture. According to the National Agricultural Statistics Service’s (NASS) Crop Progress report released on November 2, harvesting advanced slowly and reached 91 percent completed in Louisiana and 77 percent in Mississippi. Harvesting was about one week behind the NASS five-year average in both states due to inclement weather. Trading North Delta • A light volume of color mostly 31 and better, leaf 3 and better, staple 37 and longer, mike averaging 45.6, strength averaging 31.7, and uniformity averaging 81.9 traded for around 76.00 cents per pound, FOB car/truck (Rule 5, compression charges paid). South Delta • No trading activity was reported. Southwestern Markets Regional Summary East Texas Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was moderate. Average local spot prices were lower. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was inactive. Foreign inquiries were moderate. Interest was best from Pakistan, Taiwan, and Vietnam. The COVID-19 Pandemic continued to influence market uncertainty and impact global cotton demand. Infection spikes in rural areas across the market area were reported. The Corpus Christi Classing Office is more than 75 percent completed for the season. Many gins in the Coastal Bend and in the Upper Coast finished for the season, and others continued to press the backlog of modules on the gin yards. Stalks were shredded and fields were tilled for winter preparation. Ginning continued in the Winter Garden area. In the Blackland Prairies, harvesting continued at a rapid pace ahead of rainy weather. Precipitation was in the nearby forecast. Some gins experienced staffing problems. Generally, most gins had crossed the half-way mark for the season. Grades were disappointing for a few producers. Fields dried after last week’s wintry weather and daytime high temperatures were in the 70s to 80s in Kansas and Oklahoma. Harvesting went late into the nights. Modules were transported to the gin yards at a steady pace. Gins continued pressing services mostly on one shift with extended hours. Gin repairs were conducted as needed. In Kansas, dryland fields yielded around 900 to 1,100 pounds per acre and around 1,000 pounds per acre in Oklahoma. Yields from irrigated acres in Oklahoma were above average around 1,300 to 1,750 pounds per acre. In Kansas, dryland acres were harvested first, and no irrigated acres had been harvested. West Texas Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was moderate. Average local spot prices were lower. Producer interest in forward contracting was moderate. Trading of CCC-loan equities was inactive. Foreign inquiries were moderate. Interest was best from Pakistan, Taiwan, and Vietnam. The COVID-19 Pandemic continued to impact commodity markets and global cotton demand. Local infection rates have spiked. Hospitals were at capacity and diverting COVID-19 patients. Ambulance shortages were reported. Many medical care providers were in quarantine leaving gaps in staff availability. Fields firmed and harvesting advanced after sunny weather returned to the region with daytime temperature highs in the 50s to 80s, and overnight lows in the 30s and 40s. The transportation of modules from the fields to the gin yards resumed. Gins began extending operating hours and adding shifts to process seed cotton for customers. Industry members continued to mostly attend meetings virtually, including the Belt Wide Cotton conference that will be held in January. Another industry annual meeting was canceled during the period and will divert to virtual technology and the postal service to conduct business. Trading East Texas • In Texas, a mixed lot containing a heavy volume of mostly color 41, leaf 4 and 5, staple 36 and 37, mike 41-48, strength 30-32, and uniformity averaging 81.8 sold for around 64.00 cents per pound, FOB warehouse (compression charges not paid). • A light volume of cotton mostly color 31 and 41, leaf 3, 4, and 5, staple 35 and 36, mike 46-48, strength 31-33, and uniformity 80-82 sold for around 63.75 cents, same terms as above. • In Oklahoma, a mixed lot containing a light volume of cotton color 22 and better, leaf 1, staple 38, mike 40-45, strength averaging 32.3, and uniformity averaging 81.8 sold for around 72.00 cents, FOB car/truck (compression charges not paid). West Texas • A light volume containing mostly color 11 and 21, leaf 3 and better, staple 36 and 37, mike 30-42, strength 29-32, and uniformity averaging 78.4, sold for around 67.00 cents per pound, FOB car/truck (compression charges not paid). • A light volume of mostly color 11 and 21, leaf 3 and better, staple 34 and 35, mike 35-49, strength 28-33, uniformity 78-82, and 25 percent extraneous matter sold for around 64.00 cents, same terms as above. • A light volume of mostly color 11, leaf 1 and 2, staple 32 and 33, mike 37-42, strength averaging 26.3, and uniformity averaging 78.4 sold for around 57.00 cents, same terms as above. Western Markets Regional Summary Desert Southwest (DSW) Spot cotton trading was inactive. Supplies of 2020-crop cotton were moderate. Producer offerings were light. Demand was moderate. Producer interest in forward contracting was good. Average local spot prices were lower. No domestic mill activity was reported. Foreign mill inquiries were moderate. The COVID-19 Pandemic continues to pressure the U.S. economy and global cotton demand. Unseasonably warm temperatures dominated the weather pattern. Daytime high temperatures were in the 90s for central Arizona. Thursday, November 5, was a record-breaker with temperatures reaching 99 degrees. Harvesting and ginning continued uninterrupted. Harvesting neared 50 percent completed. Some gins opted to run days only and some no or limited weekend schedules, due to staffing shortages. The Visalia Classing Office reported the Arizona season average predominate color 21 was at 80.6 percent, leaf 2 at 92.4 percent, mike averaging 4.67, staple averaging 36.79, and strength averaging 29.99 for week ending November 5. Harvesting in New Mexico and El Paso, TX reached around 15-20 percent completed. The Visalia Classing Office reported the New Mexico and El Paso, TX season average predominate color 21 was at 58.1 percent, leaf 2 at 49.6 percent, mike averaging 4.45, staple averaging 36.53, and strength averaging 30.33 for week ending November 5. San Joaquin Valley (SJV) Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were lower. The COVID-19 Pandemic continues to negatively impact the U.S. economy and global cotton demand. No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light. Temperatures were in the high 70s to low 80s. No rainfall was recorded in the period. Rain is in the near-term forecast. Sources estimated harvesting was 75-80 percent completed. Sample receipts were slowly building at the Visalia Classing Office as some gins just got started. The Visalia Classing Office reported the season average of Upland saw-ginned color 21 and better at 49.9 percent, leaf 2 and better at 44.8 percent, mike averaging 4.38, staple averaging 37.03, and strength averaging 31.47 for week ending November 5. Roller-ginned Upland season average was reported as color 31 and better at 51.8 percent, leaf 2 and better at 66.5 percent, mike averaging 4.26, staple averaging 38.22, and strength averaging 35.70. American Pima (AP) Spot cotton trading was inactive. Supplies of 2019 and 2020-crop cotton were light. Demand was moderate. Average local spot prices were steady. No forward contracting was reported. Domestic mill activity was reported for a moderate volume 2019 and 2020-crop cotton. Foreign mill inquiries were moderate. New sales and exports were good and showed signs of improvement. Shippers offered new-crop cotton. Interest was best from Asia. The COVID-19 Pandemic slowed the U.S. and global economies. Unseasonably warm conditions dominated the weather pattern for Arizona and California, with daytime high temperatures in the 80s and 90s. Temperatures were in the 70s, which is typical for this time of year in New Mexico and El Paso, TX. Harvesting continued uninterrupted in Arizona and California. New Mexico and El Paso, TX producers resumed defoliation and harvesting activities after the delay from wet weather the previous week. Ginning was steady as more gins began operations. Staffing shortages were reported throughout the region and some gins were running day shift hours, while others considered no weekend schedules. The Visalia Classing Office reported the season average AP color 2 and better at 95.2 percent, leaf 2 and better at 99.0, staple averaging 48.37, mike averaging 4.19, and strength averaging 42.77 for week ending November 5. Trading Desert Southwest • A moderate volume of Arizona cotton for contract base quality color 31, leaf 3, and staple 36 and longer was contracted at even on ICE December futures. San Joaquin Valley • No trading activity was reported. American Pima • No trading activity was reported. USDA ANNOUNCES SPECIAL IMPORT QUOTA #3 FOR UPLAND COTTON November 5, 2020 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 November 12, 2020, allowing importation of 5,551,846 kilograms (25,499 bales of 480-lbs) of upland cotton. Quota number 3 will be established as of November 12, 2020 and will apply to upland cotton purchased not later than February 9, 2021 and entered into the U.S. not later than May 10, 2021. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period May 2020 through July 2020, 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.