Generally favorable U.S. harvesting weather and new estimate of a bumper crop in India weighed on sentiment. Dollar index weakness on a lower-than-expected jobs number failed to elicit a cotton market response.
Cotton futures settled with a moderate loss at the session low and another new low close for the move on thin volume Tuesday.
Spot December closed down 61 points at 82.45 cents, a tick off the low of its narrow 67-point range from up five points at 83.11 to down 62 points at 82.44 cents. This was its lowest close since Sept. 5. March settled off 53 points to 83.72 cents.
Generally favorable U.S. harvesting weather and reinforcement for a bumper crop outlook in India weighed on sentiment, analysts said. Export inquiries appeared quiet.
Volume slowed to an estimated 11,900 lots from 14,684 lots the previous session when spreads accounted for 7,347 lots or 50% and EFP for 89 lots. Options volume totaled 3,078 calls and 1,842 puts.
The Cotton Association of India raised its 2013-14 crop forecast to 38.1 million 170-kilogram bales (29.8 million 480-pound bales) from its September projection of 37.5 million (29.3 million).
Moisture from recent rains is expected to help increase yields and production, the CAI said, though late rains have delayed cotton arrivals. India is the worldΆs second largest cotton producer and exporter.
The USDA projected IndiaΆs crop in September at a record 29 million 480-pound bales, up a million bales from the previous month 2.5 million bales above the 2012-13 output.
Stiffer competitiveness from India was a major factor in USDAΆs 200,000-bale reduction from a month earlier to 10.4 million bales in U.S. export prospects. These would be the lowest U.S. exports since 2000-01.
Supply-demand adjustments made by USDA last month also projected U.S. ending stocks at a precariously tight 2.9 million bales, a million bales below last seasonΆs carryout and the second lowest since 1995-96.
Meanwhile, a weakening of the dollar index failed to elicit a cotton market response after Labor Department data showed U.S. employers added only 148,000 jobs in September. Economists surveyed by Dow Jones Newswires had expected an increase of 180,000 jobs.
The August gain was revised up to 193,000 from an earlier estimate of 169,000, but JulyΆs increase was revised down to 89,000 from 104,000. The unemployment rate ticked down to 7.2% from 7.3% in August.
The report prompted conjecture that the Federal Reserve may delay tapering its stimulus program. The fed had tied a reduction in its monthly bond purchases to improvement in the labor market.
Futures open interest fell 978 lots Monday to 202,483, with DecemberΆs down 1,085 lots to 116,074 and MarchΆs up nine lots to 64,745.
Certificated stocks grew 16,432 bales to 69,906. Awaiting review were 38,329 bales, including 6,052 bales at Galveston, 8,459 bales at Greenville and 23,818 bales at Memphis.
The Cotlook A Index of world values was unchanged Tuesday morning at 89.40 cents. The premium to MondayΆs December futures settlement widened five points to 6.34 cents.
