Cotton Surges to Highest Close Since Sept. 17
Effects of rains on U.S. crop estimate pondered. Southeast already soaked prior to heavy weekend rains. Additional rain expected on Plains.
Cotton futures surged to strong gains Monday amid concerns about the crop impact of torrential rains and historic flooding in the Southeast.
Benchmark December closed up 173 points to 61.87 cents, its highest finish since Sept. 17 and in the upper quarter of its 203-point range from up six points at 60.20 to up 209 points at 62.23 cents. It triggered buy stops above 61.20, 61.57 and 62.05.
December settled just below a 50% retracement (61.95) of the 450-point move from the Sept. 11 high of 64.20 to the Sept. 24 contract low of 59.70. March settled up 172 points to 61.68 cents.
Widespread rains on the Texas High Plains, with more in prospect, and a rise in risk-taking sentiment amid strong gains in equity markets also contributed to support in cotton.
Volume rose to an estimated 29,600 lots from 14,603 lots the previous session when spreads accounted for 6,497 lots or 44%, EFS 134 lots and EFP seven lots. Options volume totaled 2,946 calls and 2,781 puts.
Analysts pondered how the weekend rains might affect USDAΆs updated U.S. production estimate, scheduled for release at 11 a.m. CDT on Friday.
O.A. Cleveland, cotton economist and professor emeritus of Mississippi State University, said in a report ahead of the weekend that most estimates were slightly larger than USDAΆs September forecast of 13.43 million bales. But he projected a 200,000-bale smaller crop.
Unless otherwise noted, he said, the USDA estimate wonΆt account for any weekend rain, water and wind losses to the Southeastern crop. The USDA estimate will be based on conditions as of Oct. 1, he said, noting that those losses wouldnΆt have occurred by then.
A tropical weather system already had brought heavy, soaking rains to the Southeast prior to the weekend, according to a weekly cotton review posted Friday by USDAΆs Agricultural Marketing Service.
Areas from South Georgia, the Carolinas and Virginia recorded several inches of accumulated rainfall as thunderstorms drifted eastward. Overcast, cool conditions delayed maturity in later-planted fields.
Harvesting was interrupted as producers waited for water-logged soils to dry. However, harvest was well underway in the earliest fields in areas which got only sparse rainfall or which had missed the rains.
Warm, clear weather prevailed in the Delta early in the week before a storm system brought rain late in the period. Up to an inch of rain was reported. A flood advisory remained in effect for counties bordering the Mississippi River in Arkansas, Tennessee, Louisiana and Mississippi.
Harvesting had been expected to increase sharply on the Texas Plains this week, but nearly every reporting station in the Lubbock area recorded at least some rainfall over the weekend.
The heaviest amounts in the 24-hour period ended at 8 a.m. Monday included 1.38 inches at Brownfield, 1.05 at Denver City, 1.12 at Hart, 1.10 at Littlefield 1.08 at Morton and 1 inch at Olton. Mostly sunny conditions are expected Tuesday. Chances for rain are rated at 80% Wednesday night and are expected to linger Thursday and Friday.
Rains of 1-5 inches were recorded across the Carolinas over the weekend, ranging up to locally heavy 6 to 14 inches reported in central and eastern South Carolina. Areas in northern and eastern Georgia and North Carolina got 1.5 to 4 inches and Virginia recorded 1 to 3 inches.
Futures open interest increased 295 lots Friday to 188,488, with DecemberΆs up 359 lots to 122,801 and MarchΆs down 334 lots to 47,851. Cert stocks grew 86 bales to 44,843 on 134 newly certified bales and decertification of 48 bales.
