Market lost ground for the third week in a row. Mills chopped their unfixed on-call position in May. U.S. outstanding loans dropped to 2.1 million bales.
Cotton futures settled slightly mixed Friday, down 12 points to up 35 points, to cap the third losing week in a row.
Most-active July was the only loser, settling off a modest 12 ticks at 85.36 cents, in the lower reaches of its 104-point range from down 37 points at 85.11 to up 67 points at 86.15 cents. It closed six ticks under TuesdayΆs finish to a new low settlement for the move.
May closed flat at 83.48 cents, trading between 83.12 and 84.09 cents, and December eked out a nine-point gain to settle at 85.17 cents, 12 points off the low of its 105-point range.
For the week, the market lost 210 points in May, 226 points in July and 117 points in December.
Volume slowed to an estimated 19,500 lots from 23,634 lots the previous session when spreads totaled 10,445 lots or 44%, EFS 893 lots and EFP 374 lots. Options volume totaled 5,993 calls and 2,486 puts.
Unfixed on-call sales in May fell 3,196 lots to 4,715 lots on the mill side last week and dropped 32 lots to 738 on the producer side, according to the latest Commodity Futures Trading Commission data.
The net call difference thus declined 3,164 lots to 3,977, which was 11.77% of MayΆs falling open interest, up from 8.09% a week earlier. There were at the time six trading sessions left until first notice day on April 24.
Mills nudged their unfixed position in July up 216 lots to 19,704, while producers shaved theirs by 132 lots to 3,274. This increased the net call difference by 348 lots to 16,430 or 15.02% of the rising open interest, down from 21.63% the previous week.
The ratio of unfixed July mill positions to those held by producers thus widened fractionally to 6.02:1 from 5.72:1.
In December, mills added 305 lots and producers added 813 lots, raising the unfixed holdings there to 17,548 lots and 11,369 lots, respectively. This meant that mills had 1.54 contracts to price for every one by producers.
Meanwhile, U.S. all-cotton outstanding loans fell 130,430 bales during the week ended Tuesday to 2,108,548, USDA reported. Repayments were made on 130,430 bales and entries were 118 bales, little changed from 131,608 bales and 145 bales, respectively, the previous week.
Loans outstanding included 215,847 bales of Form A issued to individual growers and 2,023,131 bales of Form G issued to marketing cooperatives or loan servicing agents. Upland loans outstanding declined 121,789 bales to 2,146,527.
Futures open interest continued to decline Thursday, falling 3,180 lots to 177,834, with MayΆs down 4,485 lots to 9,167, JulyΆs up 1,192 lots to 117,550 and DecemberΆs up 107 lots to 48,716.
The rapid decline in MayΆs open interest this week has spawned conjecture that owners of a big batch of certificated stocks may plan to carry the cotton forward as a result of wide July premiums to May.
Cotton in deliverable position grew 9,930 bales to 487,875. There were 3,772 bales awaiting review for a possible total of 491,647 bales.
World values as measured by the Cotlook A Index dropped 95 points Friday morning to 91.75 cents. The index premium to May and July futures widened 22 points to 8.27 and 6.27 cents, respectively. For the week, the index dipped 45 points.