Mp_cn812
October 30, 2020
Weekly Cotton Market Review
Average spot quotations were 47 points 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 66.19 cents per pound for the week ending Thursday,
October 29, 2020. The weekly average was up from 65.72 last week and from 62.05
cents reported the corresponding period a year ago. Daily average quotations
ranged from a season high of 67.28 cents Tuesday, October 27 to a low of 65.07
cents Thursday, October 29. Spot transactions reported in the Daily Spot Cotton
Quotations for the week ended October 29 totaled 17,291 bales. This compares to
30,359 reported last week and 27,086 spot transactions reported the corresponding
week a year ago. Total spot transactions for the season were 301,037 bales compared
to 215,015 bales the corresponding week a year ago. The ICE Dec settlement price
ended the week at 69.82 cents, compared to 71.94 cents last week.
Southeastern Markets Regional Summary
Spot cotton trading was slow. Supplies and producer offerings were light.
Demand was light. Average local spot prices were higher. Trading of CCC-loan
equities was inactive. No forward contracting was reported. The COVID-19 Pandemic
continues to negatively affect cotton demand and disrupt supply chains worldwide.
Hurricane Zeta made landfall near New Orleans, LA as a Category 2 storm, then moved
quickly through portions of the lower Southeastern states. Downgraded to a Tropical
Storm as it moved inland, but still with sustained wind speeds of 60 mph and gusts up
to 80 mph; Zeta caused widespread damage to trees, powerlines, and structures. The
National Weather Service reported that more than 2.5 million people were without power
along the path of this widespread, severe storm. The storm also brought 2 to 4 inches
of accumulated precipitation to portions of central Alabama, north and central Georgia,
and metropolitan Atlanta. The National Weather Service issued river flood warnings and
tornado watches in some of the hardest hit areas of northern Alabama and central Georgia.
Harvesting activities, which had started to gain momentum, were once again at a standstill
due to inclement weather in some areas. Ginning was also interrupted by power outages
in a few places. According to the National Agricultural Statistics Service�s (NASS) Crop
Progress report released October 26, boll opening was mostly complete throughout the entire
Southeast. NASS reported that cotton harvested had reached 34 percent in Alabama and 27
percent completed in Georgia.
A mix of cloudy to sunny conditions prevailed across the upper Southeast prior to the
arrival of Tropical Storm Zeta late in the period. Daytime high temperatures varied
from the mid-60s to low 80s, with nighttime lows in the 50s to 60s. The severe storm
brought widespread precipitation and strong winds to areas throughout the central
Carolinas and Virginia; accumulated moisture measured 1 to 2 inches in most places.
Harvesting activities, including defoliation and picking, were delayed in a few places
directly in the path of Tropical Storm Zeta. Otherwise, field activities advanced at
a steady pace. Ginning slowly gained momentum as more gins accumulated sufficient modules
on gin yards to commence annual pressing operations. According to the NASS Crop Progress
report released October 26, cotton harvested reached 9 percent in South Carolina and 19
percent in both North Carolina and Virginia.
Textile Mill
Buyers for domestic mills inquired for a moderate volume of color 31 and 41, leaf 4,
and staple 36 for January through October 2021 delivery. No sales were reported.
Reports indicated that mills continued to gradually increase operating schedules as
finished product demand strengthened. Some mills were re-scheduling raw cotton for
delivery that was previously delayed due to reduced demand for goods as a result of the COVID-19
Pandemic, but the undertone remained cautious. Most mills have covered their raw cotton needs
through the fourth quarter 2020. Mills continued to produce personal protective equipment for
frontline workers and military supplies.
Demand through export channels was light. Agents for mills in China, Pakistan, and Turkey
inquired for discounted styles of cotton for January through October 2021 delivery. No sales
were reported.
Trading
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A light volume of color 41 and better, leaf 4 and better, staple mostly 38, mike 37-49,
strength 28-33, and uniformity 80-84, traded for around 74.00 cents per pound, FOB car/truck,
(Rule 5, compression charges paid).
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 higher. Trading of CCC-loan equities was
slow. A light volume of forward contracting was reported. The COVID-19 Pandemic
continues to negatively impact the overall global economy.
Unseasonably warm temperatures prevailed during the week. Daytime highs were in the
70s and 80s, while overnight lows were in the 60s. A series of rain showers spawned by
Hurricane Zeta brought up to 4 inches of unnecessary moisture throughout the territory
late in the week. All harvest activities were at a standstill 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 the transfer of modules difficult.
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 October 26, cotton harvested had reached 67 percent completed in Arkansas, 31 in Missouri,
and 46 percent in Tennessee. These figures were about one week behind the five-year average in all states.
South Delta
Spot cotton trading was inactive. Supplies of available cotton and demand were light.
Average local spot prices were higher. 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.
Hurricane Zeta made landfall as a Category 2 storm near New Orleans, the third named hurricane
and the fifth tropical system to strike Louisiana during this hurricane season. Winds of up
to 110 mph were reported in the hardest hit parishes along the coast; the storm also caused
one fatality. As the system rapidly moved inland as a tropical storm, sustained winds of up
to 60 mph, gusting up to 80 mph, continued wreaking widespread damage to structures, trees,
and powerlines. Up to 5 inches of precipitation in the cotton-producing areas in southern
Mississippi brought harvesting activities to a standstill; a number of defoliated fields
remained to be picked in that region, but no damage reports were available at this time.
According to the National Weather Service, more than 2.5 million people were without power
across the southern states. According to the National Agricultural Statistics Service�s (NASS)
Crop Progress report released on October 26, harvesting had reached 87 percent completed in
Louisiana and 63 percent in Mississippi. Harvesting was about two weeks behind the NASS five-year
average in Mississippi and near average in Louisiana. Producers with cotton still in the field
were concerned about yield losses and the potential deterioration of quality, especially leaf
and color grades, as the direct result of excessive moisture in the month of October.
Trading
North Delta
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A light volume of 2020 CCC-loan equities traded for around 15.00 cents per pound.
Producers booked a light volume of CCC-loan equities for 12.00 to 14.00 cents.
South Delta
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Producers booked a light volume of CCC-loan equities for 12.00 to 14.00 cents per pound.
Southwestern Markets Regional Summary
East Texas
Spot cotton trading was moderate. Supplies and producer offerings were moderate. Demand
was moderate. Average local spot prices were steady. Producer interest in forward contracting
was light. Trading of CCC-loan equities was moderate. Foreign inquiries were moderate. Interest
was best from China, Pakistan, and Turkey. The COVID-19 Pandemic continued to influence market
uncertainty and impact global cotton demand.
Stalks were cut and shredded in south Texas and in the Upper Coast. Some gins finished for the
season, and others continued to press the backlog of modules. Gins in the Winter Garden area were
past the halfway mark. Weather conditions turned cloudy and cooler with daytime temperature highs
in the 40s. In the Blackland Prairies, ginning continued through cold, windy conditions. Some wintry
precipitation was received in the form of rain and sleet. Most fields had been harvested, but some
areas around College Station and Waco still have fields left to be put into modules.
In Kansas, harvesting was at 11 percent, according to the National Agricultural Statistics Service�s
(NASS) Crop Progress report released on October 26. Power outages and road closures were reported
during the winter storm that brought up to 6 inches of snow in western Kansas and around 2 inches on
the eastern side of the state. Some gins suspended pressing services until the storm passed. In
Oklahoma, 21 percent of the fields had been harvested, according to NASS. Harvesting was at a
standstill due to wintry weather. The downtime was used to maintain machinery and conduct necessary
repairs. Some roads were impassable and module transportation was temporarily interrupted.
West Texas
Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was good.
Average local spot prices were higher. Producer interest in forward contracting was light.
Trading of CCC-loan equities was inactive. Foreign inquiries were moderate. Interest was best
from China, Pakistan, and Turkey. The COVID-19 Pandemic continued to impact commodity markets
and global cotton demand.
Harvesting was halted as an arctic cold front moved into the region on October 26. Daytime temperatures
ranged in the teens to low 70s, and overnight lows in the teens to mid-40s. Freezing sleet, drizzle,
and rain caused slick road conditions for three days. Module transportation and travel were stopped.
Multiple road closures were reported after numerous vehicle accidents occurred. Temperatures moved
above freezing late in the reporting period and the ice melted. Fields were too soggy to resume harvesting activities.
Trading
East Texas
�
In Texas, a mixed lot containing a light volume of mostly color 42 and better, leaf 2 and 3,
staple 36 and 37, mike averaging 46.2, strength averaging 29.3, and uniformity averaging 80.0 sold
for around 66.50 cents per pound, FOB warehouse (compression charges not paid).
�
A light volume of cotton mostly color 32 and better, leaf 3 and 4, staple 35 and 36, mike 34-43,
strength 30-32, and uniformity 81-83 sold for around 65.25 cents, same terms as above.
�
In Oklahoma, a mixed lot containing a light volume of cotton color 33 and better, leaf 2 and 3,
staple 33 and 34, mike 36-44, strength 27-29, and uniformity averaging 80.8 sold for around
61.75 cents, FOB car/truck (compression charges not paid).
�
A moderate volume of 2019 CCC-loan equities traded for 0.00 to 7.50 cents.
West Texas
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A light volume of mostly color 11, leaf 1 and 2, staple 37 and 38, mike 34-39, strength 31-33, and
uniformity 80-81 sold for around 73.75 cents per pound, FOB car/truck (compression charges not paid).
�
A moderate volume of mostly color 21, leaf 2 and 3, staple 39 and 40, mike 36-42, strength 32-36,
uniformity 80-83, and 25 percent extraneous matter sold for around 72.75 cents, same terms as above.
�
A light volume of mostly color 21, leaf 2 and 3, staple 33 and 34, mike 36-40, strength averaging 27.1,
and uniformity averaging 78.1 sold for around 62.50 cents, same terms as above.
Western Markets Regional Summary
Desert Southwest (DSW)
Spot cotton trading was slow. Supplies of 2020-crop cotton and producer offerings were moderate.
Demand was moderate. Producer interest in forward contracting was good. Average local spot prices
were firm. ICE December futures remained in the 70 cents range, which encourage producers to offer
cotton and accept contracts. 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.
A cold front ushered in cooler temperatures mid-week in Arizona. Daytime high temperatures were in
the high 60s to low 70s. No rainfall was recorded. Harvesting was active. Modules accumulated in
fields and were trucked to gin yards. Ginning continued with no interruptions. Local sources reported
yields were averaging just under 3 bales per acre. Arizona Cooperative Extension held a virtual field
day during the period. Temperatures in southern New Mexico and El Paso, TX were in the 80s and dropped
into the 30s as a strong cold front moved into the region mid-week. Overnight lows were in the 20s and
30s. Rain showers and snowfall were received in the week. Harvest was delayed due to wet field conditions.
Ginning continued. The Visalia Classing Office is operating two 8-hour shifts. The night shift started on
Tuesday, October 27.
San Joaquin Valley (SJV)
Spot cotton trading was inactive. Supplies and demand were light. Average local spot prices were firm.
No forward contracting or domestic mill activity was reported. Foreign mill inquiries were light.
The COVID-19 Pandemic continues to negatively impact the U.S. economy and global cotton demand.
Temperatures were mostly in the high 70s, but a cold front brought a hint of fall as temperatures dropped
to the high 60s for a couple of days. Overnight lows were in the high 40s. Harvesting was active. All
gins were running. Modules accumulated in fields and gin yards. Producers shredded stalks in compliance
with the California Pink Bollworm program. The Visalia Classing Office is operating two 8-hour shifts.
The night shift started on Tuesday, October 27.
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 or domestic mill activity was reported.
Foreign mill inquiries were moderate. According to the Foreign Agricultural Service, US Export Sales report
410,500 bales of Pima cotton were committed for export for the week ending October 22. This compares to
231,300 bales the previous year. New sales were registered at 34,900 bales. The COVID-19 Pandemic slowed
the U.S. and global economies.
Dry, clear weather was prevalent in Arizona and California. New Mexico and El Paso, TX received rain and
snow in the period. Harvest was gaining momentum throughout the Far West. Ginning continued uninterrupted.
The Visalia Classing Office is operating two 8-hour shifts. The night shift started on Tuesday, October 27.
Trading
Desert Southwest
�
A moderate volume of 2020-crop cotton color 11, leaf 2 and better, staple 38 and longer, mike averaging 46.3,
strength averaging 29.4, and uniformity averaging 80.5 traded for 100 to 125 points on ICE December futures.
�
Similar lots containing color 11 and 12, and staple 36 sold for around 100 points off ICE December futures.
�
A moderate volume of Arizona cotton for contract base quality color 31, leaf 3, and staple 36 was
contracted at even to 50 points on ICE December futures. These contracts were subject to government
discounts with premiums paid for qualities better than the contract base quality.
San Joaquin Valley
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No trading activity was reported.
American Pima
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No trading activity was reported.
USDA ANNOUNCES SPECIAL IMPORT QUOTA #2
FOR UPLAND COTTON
October 29, 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 5, 2020, allowing importation of 5,551,846 kilograms
(25,499 bales of 480-lbs) of upland cotton.
Quota number 2 will be established as of November 5, 2020 and will apply to upland cotton purchased
not later than February 2, 2021 and entered into the U.S. not later than May 3, 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.