U.S. weekly export data expected to confirm that shipments have exceeded the USDA estimate. Higher shipments expected to result in lower ending stocks.

Cotton futures finished with gains of 50 to 103 points across the board Wednesday as the U.S. dollar weakened and traders awaited the U.S. weekly export sales-shipments report.

December led the gains, settling at 70.34 cents, a new high finish since June 14 and just off the high of its 103-point range from down nine points at 69.22 to up 109 points at 70.40 cents.

March gained 93 points to close at 69.62 cents, just below the high of its 100-point range from 68.65 to 69.65 cents. October added 58 points to settle at 71.75 cents, trading within a 68-point range from 71.17 to 71.85 cents.

Volume quickened from a slow start to reach an estimated 25,267 lots, up from 19,329 lots the prior session when spreads accounted for 5,970 lots or 31% and EFS 86 lots. Options volume slipped to 5,846 lots (3,406 calls and 2,439 puts) from 6,318 lots (3,644 calls and 2,674 puts).

Some expectations for U.S. export sales for 2016-17 and 2017-18 during the week ended July 27 have ranged on both sides of the prior week’s combined 260,900 running bales of upland and 265,200 RB of all cotton. Few old-crop sales are expected.

December futures during the reporting week closed within only a 60-span, from 68.29 to 68.89 cents, and traded within a 221-point range from 67.51 to 69.72 cents. The low was at the beginning of the week and the high at the end.

The USDA report, set for release at 7:30 a.m. CDT Thursday, is expected to confirm that 2016-17 shipments have exceeded the USDA export forecast and will result in 2017-18 beginning stocks below the current estimate.

Net upland sales the last four weeks have averaged 65,700 RB a week for 2016-17 and 212,200 RB for 2017-18. Old-crop supplies are considered sold out or even oversold. Upland shipments have averaged 276,300 RB, having hit an eight-week high in the week ended July 20 at 326,800 RB.

Some estimates on final 2016-17 shipments have ranged to around 14.8 million to 14.9 million statistical bales, compared with USDA’s projected 14.5 million SB. This would mean a corresponding reduction in carryover stocks, currently forecast at 3.2 million SB, assuming 2016-17 domestic mill use remains unchanged at an estimated 3.3 million bales.

Shipments, forecast at the second highest on record, have reflected improved market share in many countries, according to USDA, as global cotton consumption has only modestly raised world import demand.

The USDA will update its 2016-17 and 2017-18 U.S. and world supply-demand forecasts on Aug. 10.

Futures open interest edged up 194 lots to 216,622 on Tuesday, with December’s down 192 lots to 155,808 and March’s up 250 lots to 42,473. Certified stocks declined 1,876 bales to 29,112.

Source:  http://agfax.com/2017/08/02/dtn-cotton-close-settles-on-6-week-high/