Uncertainty about the effects of cool, wet conditions on the Texas Plains crop offered support. U.S. export commitments widened the lead over cumulative sales a year ago to 2.2 million RB. Shipments lagged.
Cotton futures bounced off an early dip to near the prior-session low in December and finished on a modest gain in another round of slow dealings Thursday.
December settled up 32 points to 68.97 cents, in the upper third of its 104-point range from down 39 points at 68.26 cents to up 65 points at 69.30 cents. December traded to within eight points of Wednesday’s low and rallied 20 points above its high. Since its limit-down close on Sept. 12, December’s settlements have ranged from 69.50 to 68.25 cents.
March closed up 26 points to 68.05 cents, trading within an 83-point range from 67.50 to 68.33 cents. Maturing October remained untraded for the fourth straight session and still hasn’t drawn any delivery notices. Its last trading day is Oct. 9.
Support stemmed partly from uncertainty about the effects of cool, wet conditions on the quantity and quality of the Texas Plains crop. A return to warm, sunny weather could help to mitigate crop concerns, but there’s not a lot of time left to make up for the slowdown in fiber maturity under normal fall temperatures and with days getting shorter.
Volume totaled an estimated 12,872 lots, compared with 12,816 lots the prior session when spreads accounted for 3,857 lots or 30% and EFP nine lots. Options volume rose to 9,640 lots (6,756 calls and 2,884 puts) from 5,364 lots (3,246 calls and 2,118 puts).
Net U.S. all-cotton export sales for shipment this season of 209,800 running bales, down from the prior week’s 278,400 RB, lifted 2017-18 commitments to 7.525 million RB.
Despite the sales dip for the week, commitments widened the lead over cumulative sales a year ago by 97,000 RB to 2.206 million RB or to 41% and were 51% of the USDA export forecast. A year ago, commitments were 37% of final 2016-17 exports.
All-cotton shipments of 137,900 RB, down from 181,300 RB the previous week, boosted the total for the marketing year to 1.304 million RB, widening the gap behind exports a year ago by 22,000 RB to 119,000. Exports were 9% of the USDA forecast, compared with nearly 10% a year ago.
To achieve the projection, shipments now need to average roughly 298,900 RB a week, while sales averaging approximately 157,500 RB would match the export forecast.
Sales for shipment next season of 8,500 RB, down from all-cotton bookings of 56,800 RB the week before, brought 2018-19 commitments to 745,100 RB, compared with 428,000 RB in forward sales a year ago.
On the weather front, cool, cloudy wet conditions persisted Thursday in the Texas High and Rolling Plains, with temperatures struggling to “warm” into the 60s in the Lubbock area.
Most of the region has recorded 1 to 3 inches of rain over four to five days with pockets of 3 to 5 inches. Some minor flooding developed at times, according to the National Weather Service, but the rains were spread out in time enough to prevent more serious flooding.
A 50% chance for showers and thunderstorms is seen for the Lubbock area on Friday, with a turn toward drier, warmer weather finally expected Saturday, though a few showers and storms could linger. Sunny skies and a high 80 degrees are forecast for Sunday.
After a mostly warm and dry month, the late September rains quickly boosted rain totals above monthly averages. Coming into Thursday, Lubbock had recorded 2.64 inches since Sept. 1, up from the normal of 2.3 inches and last year’s 1.47 inches. Since Jan. 1, precipitation has totaled 20.6 inches, 5.23 inches above normal and up from 11.39 inches last year.
Futures open interest dropped 937 lots to 233,507 on Wednesday, with December’s down 433 lots to 133,007 and March’s down 738 lots to 69,893. Certified stocks dipped 89 bales to 1,683.
Source: Agfax