Traders awaited U.S. weekly export sales-shipments report. China’s 2018-19 cotton imports projected to climb to 6.4 million bales from 5.05 million estimated for this season.
Underpinned by mill fixations in July, cotton futures rebounded strongly Wednesday to recapture much of the ground lost the previous session.
July settled up 243 points to 83.94 cents, in the upper quarter of its 302-point range from down a point at 81.52 cents to up 303 points at 84.54 cents. The rally got within a tick of Tuesday’s high. Maturing and thinly traded May led the gains, closing up 250 points at 84.76 cents.
December gained 140 points to close at 78.99 cents, near the high of its 147-point range from unchanged at 77.57 cents to 79.06 cents. The other traded contracts settled up 24 points to 123 points.
Volume slowed to an estimated 33,100 lots from 40,048 lots the previous session when spreads accounted for 10,709 lots or 27%, EFS 134 lots and EFP 12 lots. Options volume rose to 11,311 lots (5,989 calls and 5,322 puts) from 7,311 lots (3,679 calls and 3,542 puts).
Traders awaited the U.S. weekly export sales-shipments report, scheduled for release by USDA at 7:30 a.m. CST on Thursday. Prices during the reporting week ended April 19 ranged from 83.94 cents to 81.97 cents, basis July, and ended the period at 82.82 cents.
Net upland sales for shipment this season have averaged 285,400 running bales the last four weeks, down 17% from 344,400 RB the prior four weeks. However, all-cotton commitments stand 109% above the USDA export projection.
Upland shipments have averaged 438,100 RB, up 44% from 304,400 RB the previous four weeks and well above the pace needed to achieve the forecast. As of April 12, all-cotton shipments were 288,800 RB or 3% behind last year. Shipments have been steadily narrowing the gap.
Net upland sales for 2018-19 jumped to 229,800 RB for the last reporting week, second highest of the season, and included 25,600 RB for China in the face of U.S.-China trade issues.
Looking ahead, China’s 2018-19 imports are projected to rise to 1.4 million metric tons (6.4 million 480-pound bales) by USDA’s Foreign Agricultural Service post in Beijing.
Anticipating sales of cotton reserves and continuing restrictions on cotton imports, the FAS report estimated China’s 2017-18 imports at 1.1 million tons (5.05 million bales), almost unchanged from the previous year.
The FAS said the 2018-19 forecast is with the assumption that the government will issue additional import quotas to meet the textile industry’s demand for higher-grade foreign cotton to help stay competitive in export markets.
Certified stocks declined 283 bales to 67,714. There were 1,760 bales decertified at Galveston and 1,477 newly certified bales at Memphis. Open interest declined 2,665 lots to 262,114 on Tuesday, with May’s down 91 lots to 247, July’s down 4,572 lots to 132,015 and December’s up 1,653 lots to 104,581.
