Mills boosted their unpriced on-call sales to a record 13.1 million bales. World cotton stocks outside China projected up nearly 30% from 2016-17 and 20% from the prior record in 2014-15. Cert stocks fell to lowest in years.
Cotton futures meandered to a mostly lower finish in tight-range price action Friday, with thinly traded October posting the only gain.
December eased down a marginal five points to settle at 69.07 cents, just above the midpoint of its 67-point range from up 15 points at 69.30 cents to down 52 points at 68.63 cents. It lost 552 points for the week.
March closed down 54 points to 67.99 cents, near the low of its 81-point range from 68.69 to 67.88 cents and down 542 points for the week. October gained 35 points to close at 70.13 cents. The other contracts finished down 29 to 80 points.
A generally favorable nearby weather outlook for most of the U.S. Cotton Belt may have helped to keep rally efforts in check.
Volume slowed to an estimated 19,023 lots from 21,771 lots the prior session when spreads accounted for 8,253 lots or 38%, EFP 120 lots and EFS 40 lots. Options volume declined to 4,789 lots (3,340 calls and 1,449 puts) from 9,668 lots (5,367 calls and 4,301 puts).
Mills boosted their total unpriced on-call sales 3,611 lots to a new record 131,053 lots (13.105 million bales) last week, figures reported by the Commodity Futures Trading Commission showed after the close Thursday.
Producers fixed prices on 879 lots to reduce their unfixed position to 38,435 lots. This resulted in the net call difference rising 4,470 lots to 92,618, which was 37.6% of the increasing open interest. The unpriced mill position represents a lot of potential scale buying.
A year ago, unpriced positions were 73,062 lots for mills and 23,308 lots for producers. The net call difference was 49,754 lots, 21.5% of an expanding OI.
In December, mills added 760 lots last week to raise their unfixed position to 31,912 lots and producers priced 1,831 lots to cut theirs to 18,396 lots.
Meanwhile, reviewing this month’s USDA supply-demand revisions, Cotton Inc. noted that all the increase in world ending stocks is projected outside China.
“This is relevant because the cotton in storage outside China is available for trade and therefore available to weigh on prices,” CI pointed out in a monthly report.
The forecast for stocks for the world-less-China is a record 53.1 million bales. This is nearly 30% higher than the 41.2 million bales in storage at the end of the 2016-17 marketing year and up 20% from the prior record of 44.8 million bales set 2014-15.
The stocks-to-use ratio for the world-less-China now is projected to top the prior record by more than 10 percentage points, rising to 62.9% in 2017-18 from 52.3% in 2014-15.
Futures open interest declined 1,652 lots to 242,288 on Thursday, with December’s down 1,453 lots to 141,343 and March’s down 366 lots to 71,611, but total OI still was up 1,170 lots from a week ago.
Certified stocks fell 2,431 bales to 4,223, down from 8,728 bales a week ago and 34,318 bales a year ago. The stocks fell below a prior low of 6,441 bales in March 2015 to the lowest on available records back through at least February 2002.