Weekly Cotton Market Review
Average spot quotations were up 73 points from 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 68.29 cents per pound for the week ending Thursday, December 10, 2020. This is the highest weekly average since May 2, 2019 when the average was 71.23. The weekly average was up from 67.56 cents last week and from 61.60 reported the corresponding period a year ago. Daily average quotations ranged from a low of 67.21 cents Friday, December 4 to a season high of 69.90 cents Thursday, December 10. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended December 10 totaled 98,938 bales. This compares to 52,082 reported last week and 141,261 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 630,082 bales compared to 602,117 bales the corresponding a week a year ago. The ICE March settlement price ended the week at 74.26 cents, compared to 71.11 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 higher. Trading of CCC-loan equities was inactive. The COVID-19 Pandemic continues to negatively affect cotton demand and disrupt supply chains.
Overcast and rainy conditions prevailed across the lower Southeast over the weekend, but clear and sunny conditions dominated the weather pattern later in the week. Seasonably cold daytime high temperatures varied from the upper 40s to mid-60s. Widespread showers brought moisture to Gulf coastal areas, portions of north Alabama, and areas throughout Georgia. Weekend accumulated rainfall totals measured from one-half of an inch to one and one-half inches. The wet weather interrupted fieldwork, but sunny skies and breezy conditions later in the week helped fields to dry. Harvesting resumed as soils firmed enough to support equipment. Gins continued to process backlogs of modules without interruption. Lower qualities and reduced yields continue to be reported, due to wet conditions during the harvest season.
A mix of sunny to overcast conditions was observed across the upper Southeast during the period. Daytime high temperatures in the mid-60s to 50s over the weekend dipped into the mid-40s early in the week. A warming trend later in the week pushed temperatures back up into the upper 50s. Foggy conditions were observed in some locales and widespread showers brought light-to-moderate precipitation to areas throughout the central Carolinas and Virginia. Precipitation totals measured from trace amounts to around 1 inch of moisture, with heavier accumulations reported in some areas.
Harvest activities were interrupted by the wet weather, but fieldwork resumed as dry conditions allowed.
Ginning continued uninterrupted.
Buyers for domestic mills purchased a moderate volume of color 41, leaf 3 and 4, and staple 34-36 for January through October 2021 delivery. Buyers for domestic mills also inquired for a moderate volume of color 41-51, leaf 5 and better, and staple 32 and longer for first through fourth quarter delivery. No additional sales were reported. Reports indicated that mills continued to incrementally increase operating schedules as warranted by increased finished product demand. Yarn demand was good.
Mills continued to produce personal protective equipment for frontline workers and military supplies.
Demand through export channels was light. Demand was good for any discounted or low-grade styles of cotton.
• A moderate volume of color 41, leaf 3 and 4, staple mostly 38 and 39, mike 37-49, strength 29-32, and uniformity 81-83 sold for around 100 points on ICE March futures, FOB car/truck (Rule 5, compression charges paid).
• A moderate volume of color 31 and 41, leaf 3-5, staple 36 and 37, mike 43-52, strength 29-31, and uniformity 80-82 sold for around 300 points off ICE March futures, same terms as above.
• A light volume of color 31 and 41, leaf mostly 3 and 4, staple 38 and 39, mike 43-49, strength 30-32, and uniformity 80-82 sold for around 200 points off ICE March futures, FOB car/truck, Georgia terms (Rule 5, compression charges paid, 30 days free storage).
• Mixed lots containing color 31-42, leaf 3 and 4, staple 34-37, mike 37-52, strength 27-30, and uniformity 79-81 sold for around 250 points off ICE March futures, same terms as above.
• A light volume of color 31 and 41, leaf 3 and 4, staple 37 and 38, mike 37-47, strength 32 and higher, uniformity 80-82, and 25 percent extraneous matter sold for 275 points off ICE March futures, same terms as above.
Spot cotton trading was active. Supplies and producer offerings were heavy. Demand was very good.
Average local spot prices were higher. Producer interest in forward contracting was light. Trading of CCC-loan equities was slow. Foreign inquiries were heavy. Interest was best from China, Pakistan, and Vietnam. The COVID-19 Pandemic continued to impact commodity markets and global cotton demand. Infection spikes continued to pressure local medical institutions and resources.
Final harvesting in the High Plains made good progress under unseasonably warm conditions with daytime highs in the low 50s to upper 70s and overnight lows in the 20s to 30s. A winter storm is in the nearby forecast and expected to deposit rain and snow intermittently. Morning humidity and frost delayed field activities a few hours on December 8. Most fields have been harvested on the High Plains, but fieldwork was active in the Rolling Plains. Yields were less than expected, but quality remained good. Many gins reported that pressing services will be completed before the Christmas holiday. Virtual industry meetings were held on Zoom and in person with social distancing protocols in place to help prevent the spread of COVID-19.