Export barriers highlighted in USTR report. Drop generally expected in U.S. weekly export sales report from USDA on Thursday.
Cotton futures closed on another new rally high finish in choppy price action Wednesday, extending a streak of higher settlements to a rare five in a row.
Spot May edged up 12 points to close at 61.63 cents, in the lower third of its 106-point range from up 86 points at 62.37 to down 20 points at 61.31 cents. It matched the intraday high of Feb. 4 and closed at a new high finish since Feb. 3.
July gained 38 points to settle at 61.29 cents and December rose 53 points to close at 60.30 cents.
Volume was estimated at a still-heavy 68,309 lots, down from a huge 73,596 lots the previous session when spreads accounted for 43,219 lots or 59%, EFP 166 lots and EFS 35 lots. Options volume totaled 5,606 calls and 4,912 puts.
On the Washington scene, U.S. Trade Representative Michael Froman has released a report highlighting major trade barriers imposed on American exports by other countries.
Unwarranted barriers to selling “Made in America” goods abroad harm the livelihood of American workers, farmers, ranchers and businesses of all sizes. The report updates USTRΆs effort to reduce the barriers.
Among the barriers cited are custom duties levied by Bangladesh on raw cotton, ChinaΆs domestic cotton support and reserve program and IndiaΆs domestic cotton support system.
Also cited are PakistanΆs recent import duty on cotton yarn and the Vietnamese government continuing not to recognize the validity of arbitration awards following contract defaults in 2012.
“The United States already has one of the worldΆs most open economies,” Froman noted. “But not all countries are playing by the same rules, and all too often our workers and businesses face significant obstacles when they export their goods and services abroad.
“Opening foreign markets through smart, high-standard agreements — and enforcing our existing agreements to ensure that other countries live up to their commitments — is how we can level that playing field and make trade deliver for the American middle class,” he added.
U.S. raw cotton exports are projected to account for 73% of the fiber cropΆs total 2015-16 market offtake, which at 13.1 million bales is forecast at the smallest in three decades.
Traders will eye USDAΆs weekly export sales-shipments data Thursday as a measure against the export forecast of 9.5 million statistical 480-pound bales. A dip from the prior weekΆs sales is generally expected.
The export projection is down nearly 16% from last season amid the smallest U.S. cotton supply since 1984-85 along with the lowest foreign import demand in seven years.
Upland sales have averaged 151,600 running bales a week the last four reporting weeks and upland shipments have averaged 288,600 RB. Net upland sales were 210,900 RB in the last reporting week ended March 31 and shipments were a crop year high of 331,400 RB.
Futures open interest fell 3,192 lots Tuesday to 211,884, with MayΆs down 11,107 lots to 32,962 and JulyΆs up 7,765 lots to 91,053. Cert stocks grew 1,318 bales to 38,656.
