Cotton Trades to Virtual Standoff in December
Export sales came in near the high of expectations but commitments trail year-ago bookings by 2.1 million running bales. Early morning freezes reported likely in northern Texas High Plains.
Cotton futures traded to a virtual standoff in spot December Thursday after touching a new three-week low in the wee morning hours.
December settled up a point to 61.95 cents, below the midpoint of its tight 54-point range from down 18 points at 61.76 cents to up 36 points at 62.30 cents. March finished up 11 points to 62.13 cents.
Index fund rolling of longs from December continued as the front contractΆs settlement discount to March widened to 18 points. December had settled at a discount to March on Wednesday for the first time since Aug. 12. December options expire next Wednesday and first notice day is Nov. 23.
Volume slipped to an estimated 30,800 lots from 48,384 lots the previous session when spreads accounted for 26,680 lots or 55%, EFS 1,500 lots, block trades 1,000 lots and EFP 104 lots. Options volume totaled 2,602 calls and 2,610 puts.
The market bounced modestly on the heels of USDAΆs export sales-shipments report. Net U.S. all-cotton export sales for shipment this season of 161,000 running bales during the week ended Oct. 29, up from 79,100 the previous week, brought 2015-16 commitments to 3.825 million.
Upland sales of 147,200 RB were near the high of the range of some expectations from 75,000 to 150,000 and Pima sales reached a marketing year high for the extra-long staple cotton of 13,800 RB.
Commitments of upland and Pima combined — outstanding sales plus shipments — still trailed year-ago bookings by 2.143 million RB or by 36%. Cumulative sales were 39% of the USDA export forecast, compared with 55% of final shipments at the corresponding point last season.
All-cotton shipments of 166,800 RB, a crop year high and up from the prior weekΆs 74,500 RB, boosted exports for the season to 1.413 million. This widened the lead over exports a year ago to 243,100 RB. Shipments were 14% of the forecast, compared with 11% of final exports a year ago.
Upland sales for shipment next season of 7,700 RB hiked 2016-17 commitments to 592,200, up from 489,100 in forward bookings a year ago.
On the weather scene, a few overnight showers left no more than a few hundredths of an inch at reporting sites on the Texas High Plains, while Childress in the Rolling Plains got 0.55 of an inch. Sunny skies are expected through early next week.
Early morning freezes are reported likely Friday, Saturday and Sunday in northern areas of the High Plains. Lows at Lubbock are forecast at 34 degrees. Winds were expected to reach sustained speeds of 30 to 35 miles per hour for a few hours in parts of the area Thursday afternoon, particularly northwest of Lubbock.
Futures open interest fell 5,272 lots Wednesday to 194,055, with DecemberΆs down 7,066 lots to 91,368 and MarchΆs up 493 lots to 73,524. Cert stocks dropped 377 bales to 41,975. There were 3,702 newly certified bales, 4,079 bales decertified and 5,746 bales awaiting review.