Further decline expected in U.S. weekly export sales. Global trade projected to fall 17%. U.S. ginning as of Sept. 15 totaled 291,850 bales.
Cotton futures punched up to a four-session high, retreated to test the dayΆs low and bounced to close with a modest gain Wednesday.
Benchmark December settled up 27 points to 84.65 cents, 11 points below the midpoint of the dayΆs 110-point range from 84.21 to 85.31 cents and nine points below the middle of last weekΆs 208-point trading span.
December rose to a tick above FridayΆs high, quickly slid to within a point of the dayΆs low and bumped up to settle with a two-day gain totaling all of 38 points. March edged up 13 points to 84.42 cents. October, with an open interest of only 29 lots, didnΆt trade.
Volume increased to an estimated 15,000 lots from 9,530 lots the previous session when spreads totaled 3,997 lots or 42%, EFS 56 lots and EFP 14 lots. Options volume totaled 2,709 calls and 1,419 puts.
A further decline in U.S. export sales is expected in the USDA data due at 7:30 a.m. CDT Thursday for the week ended Sept. 19. December futures during the reporting week ranged from 83.90 to 85.78 cents.
Global cotton trade is expected to reach only 39 million bales in 2013-14, 17% below the record 46.7 million bales set in 2012-13, according to USDA. The reduced trade is attributed to the 9.3-million-bale decline to 11 million in ChinaΆs expected raw cotton imports this season.
Some of ChinaΆs stocks built up over the last several seasons are expected to be made available to the domestic spinning industry there, thus reducing the need for imports from the levels of 2011-12 and 2012-13. ThereΆs been talk that China may resume sales in October.
However, a number of other major importers are expected to purchase more cotton this season, including Turkey, Pakistan, Indonesia and Vietnam.
With reduced global import demand, competition among the major exporting countries likely will increase. All the leading exporters are expected to see reduced shipments this season, USDA analysts say.
In addition to the 20% decline to 10.4 million bales forecast for the United States, lower shipments also are projected for India at 7 million bales, Australia at 4.2 million and Brazil at 6.2 million.
For Australia and Brazil, sharply lower beginning stocks have resulted in lower exportable supplies.
An official in IndiaΆs Ministry of Textiles is reported to have continued to talk of imposing a tax on cotton exports beyond some stipulated limit.
Meanwhile, U.S. ginning reached 291,850 running bales through Sept. 15, down from 755,500 bales a year ago, 1,094,750 bales in 2011 and 747,200 bales in 2010, USDA said. Texas gins had processed 286,900 bales, compared with 691,350 in 2012, 1,012,450 in 2011 and 521,550 in 2010.
Futures open interest edged up 61 lots Tuesday to 182,453, with DecemberΆs down 757 lots to 118,541 and MarchΆs up 668 lots to 50,611. Certificated stocks grew 4,857 bales to 19,818. The additions were at Greenville, S.C.
The Cotlook A Index of world values was flat at 90.30 cents. The premium to TuesdayΆs December futures settlement narrowed 11 points to 5.92 cents.