U.S. estimates virtually unchanged, with crop down 36,000 bales, while the world carryout rose fractionally. ChinaΆs crop cut by a less-than-expected 500,000 bales.
Cotton futures settled with slight gains Tuesday, showing muted response to USDAΆs monthly supply-demand estimates featuring an unchanged U.S. carryout and fractionally higher world ending stocks.
Spot March rallied from an early dip below the prior-session low to settle at 80.69 cents, its highest finish since Oct. 24. It closed just off the high of its 103-point range established prior to the USDA report from down 60 points at 79.76 to up 43 points at 80.79 cents.
Analysts had expected the unchanged U.S. ending stocks forecast — though many had looked for a slightly larger crop and exports — and generally had anticipated a modest cut in the world carryout.
Volume totaled an estimated 14,400 lots, against 14,638 lots the previous session when spreads accounted for 6,228 lots or 43% and EFP for nine lots. Options volume totaled 4,716 calls and 2,097 puts.
The U.S. estimates came in virtually unchanged from last month, with production down 36,000 bales to 13.069 million as decreases in the Southeast were mostly offset by increases in the Delta.
Other estimates were steady at 3.6 million bales for domestic mill use, 10.4 million bales for exports and 3 million for ending stocks. The USDAΆs crop year average farm price forecast ranged from 70 to 78 cents, unchanged at the midpoint of 74 cents but narrowed a cent on each end.
Yields are expected to average 806 pounds per acre, down two pounds from the November forecast and 11 pounds below the five-year average.
Regionally, upland output dipped 129,000 bales to 4.486 million in the Southeast, rose by 85,000 bales to 2.75 million in the Delta, eked up 3,000 bales to 4.337 million in the Southwest and edged up 5,000 to 870,000 in the West. Pima production was unchanged at 626,000 bales.
Globally, beginning stocks rose by 1.08 million bales to 89.14 million, partly offset by a modest 390,000-bale cut to 116.83 million in production. Consumption was virtually unchanged, edging up 50,000 bales to 109.68 million.
The increase in beginning stocks was based on prior-year reductions in IndiaΆs consumption from official sources, USDA said. ChinaΆs crop was cut by a less-than-expected 500,000 bales to 32 million, PakistanΆs rose by 300,000 bales to 10 million and IndiaΆs held steady at 29 million.
World import demand declined 450,000 bales to 38.5 million, mainly because of larger available supplies in India and Pakistan.
The global carryout edged up 700,000 bales or 0.74% to a new record high 96.41 million. ChinaΆs projected ending stocks fell 500,000 bales to 57.31 million, reflecting the crop cut. These would comprise nearly 60% of the world carryout.
Ending stocks in the rest of the world outside China rose 1.2 million bales to 39.1 million. Increases included 100,000 bales each in India and Pakistan, 200,000 in Australia and 410,000 in Central Asian countries.
Futures open interest expanded 1,832 lots Monday to 160,770, with MarchΆs up 71 lots to 111,561 and MayΆs up 1,429 to 26,644.
Certificated stocks declined 2,191 bales to 88,950. There were 2,210 bales decertified, 19 bales newly certified and 2,892 bales awaiting review.
World values as measured by the Cotlook A Index dipped 15 points Tuesday morning to 86.65 cents. The premium to MondayΆs March futures settlement narrowed 10 points to 6.29 cents.
