China data weighed. Another hard freeze forecast on the Texas High Plains. No significant moisture has fallen in the prime cotton area since Feb. 25.
Cotton futures fell to new intraday old-crop lows for the move and settled near there Tuesday ahead of the notice period for May deliveries.
Most-active July settled off 105 points to 85.10 cents, in the lower reaches of its 140-point range from 86.25 cents — four ticks shy of MondayΆs high — to 84.85 cents, its lowest intraday price since Feb. 28.
The May contract closed off 165 points to 82.68 cents, 14 points off the low of its 182-point range ahead of first notice day on Wednesday.
New-crop December lost 78 points to close at 85.41 cents, trading within a 125-point span from a six-session high at 86.43 to 85.18 cents. The low matched MondayΆs low and held above last weekΆs low of 84.50. December widened its closing premium to July to 31 points.
Data showing slower manufacturing growth in China, the worldΆs largest cotton consumer and importer, contributed to the losses, analysts said. This followed disappointing first quarter growth data China reported early last week.
Volume increased to an estimated 24,400 lots from 15,235 lots the previous session when spreads totaled 6,290 lots or 41%, EFP 271 lots and EFS 8 lots. Options volume totaled 1,543 calls and 3,604 puts.
A widespread freeze with record low temperatures may develop tonight through Wednesday morning on the Texas High Plains, forecasters say. Readings are expected to drop below 28 degrees in many areas, with a low of 29 degrees forecast for Lubbock, against MondayΆs high of 92 degrees.
Little to no significant rain is foreseen in the prime cotton region for the next week, with just a slight 10% chance forecast for Lubbock on Thursday night.
Rainfall probabilities normally begin to improve during the third week of March, but Lubbock measured only a trace of precipitation last month, compared with a normal of 1.10 inches.
Subsoil moisture — an important reservoir for tap-rooted cotton that makes it into the summer — is scant, depleted by the ongoing long-term drought which began in the fall of 2010.
From October through April thus far, a period for fresh accumulation of subsoil moisture for the upcoming crop, precipitation at Lubbock has totaled only 3.24 inches, 43% of the normal 7 inches.
The amount of overall moisture received during the past 24 to 30 months ranked from the first to third driest for similar length droughts, the National Service at Lubbock said last month in a drought report.
A devastating drought in the 1950s lasted six years. Long-term records show the region experienced similar two-year droughts around 1909-10, 1916-18, 1933-34 and 1950-56.
Since 1956, the region has seen some bad single-year droughts, the report noted, but nothing of this extreme lasting for two years or more.
Winter precipitation in January and February provided some relief, allowing farmers to put up the land in good shape, but no significant moisture has fallen since Feb. 25, and short-term drought conditions have begun to deteriorate.
Futures open interest fell 1,525 lots Monday to 173,148, with MayΆs down 1,996 lots to 4,129, JulyΆs up 395 lots to 117,635 and DecemberΆs up 17 lots to 48,945.
Certificated stocks grew 10,711 bales to 498,497. There were 2,753 bales awaiting review for a possible total of 501,250 bales.
World values as measured by the Cotlook A Index gained 75 points Tuesday morning to 92.50 cents. The index premium to MondayΆs July futures settlement narrowed four points to 6.35 cents.
