U.S. all-cotton classing reached 6.395 million running bales, down about 37% from a year ago and about 50% of the crop forecast. Peru foregoes duty on U.S. cotton imports.
Cotton futures surged to a three-session intraday high, basis most-active March, and settled strongly ahead on slowed activity Monday.
March gained 123 points to close at 78.46 cents, in the upper quarter of its 159-point range from up two points at 77.25 to up 161 points at 78.84 cents. This was its highest finish since Nov. 13. Maturing December closed up 175 points to 76.96 cents.
Volume fell to an estimated 15,600 lots from 23,071 lots the previous session when spreads totaled 6,183 lots or 27%, EFP 511 lots and EFS 25 lots. Options volume slid to 748 calls and 1,519 puts.
U.S. all-cotton classed through the week ended Nov. 21 of 1,291 million running bales boosted the total for the season to 6.395 million, down about 37% from the 10.186 million graded through the corresponding period last season.
The USDA has classed about 50% of the all-cotton production estimated by the National Agricultural Statistics Service. Classing of 1.238 million bales of upland brought that 2013-crop total to 6.105 million, down from 9.901 million bales a year ago.
Cotton tenderable on futures contracts improved to 65.5% for the week and 62.4% for the season, according to the Agricultural Marketing Service. A year ago, 56% for the season met tenderable requirements.
Upland cotton classed for the week in Texas of 398,896 bales, against 400,471 bales the previous week, brought the statewide count for the season to 2.025 million.
That was about 51% of the USDA November estimate of the Texas upland crop. The large bulk of the crop still to be ginned in Texas was in the High and Rolling Plains.
Meanwhile, a Peruvian commission on competition and intellectual property has decided not to impose a countervailing duty on imports of U.S. cotton.
The commission found following an 18-month investigation no causal link between imports of U.S. cotton and the economic situation of PeruΆs cotton farmers.
The decision must go through a 15-day waiting period to allow an appeal. It will mean that U.S. cotton will continue to be available to PeruΆs textile industry, free of import duties, as agreed to in the U.S.-Peru Free Trade Agreement.
In a news release, the National Cotton Council welcomed the action and said the commission arrived at the correct decision, based on “recent market dynamics and drastically reduced cotton program spending.”
Futures open interest increased 1,917 lots Friday to 156,120, with DecemberΆs down 896 lots to 1,909 and MarchΆs up 1,583 lots to 113,433.
Certificated stocks grew 9,746 bales to 222,807. Awaiting review were 20,272 bales. Traders expect the large commercial stopper of December deliveries to decertify the cotton, considering the cash basis and straddle differences.
World values as measured by the Cotlook A Index fell 100 points Monday morning to 83.75 cents. The premium to FridayΆs March futures +settlement widened 12 points to 6.52 cents.