Cotton Finishes at Eight-Session Low
Projected storm path adjusted. Upland classing lagged at 562,603 bales. Cotton under loan rose to 120,945 bales. World stocks forecast by ICAC hiked by 1%. Base 2016-crop upland loan rate announced at 52 cents.
Cotton futures lost ground steadily after posting an early morning high Friday, finishing at an eight-session low close as weather reports indicated diminished potential for crop damage from Hurricane Joaquin.
Benchmark December closed down 46 points to 60.14 cents, just off the low of its 112-point range from up 60 points at 61.20 to down 52 points at 60.08 cents. It topped the prior dayΆs inside-range high but closed at its lowest finish since its contract low settlement at 59.97 on Sept. 23.
March settled down 33 points to 59.96 cents. For the week, December closed off 50 points and March dropped 38 points.
Joaquin now is projected to follow a path farther from the U.S. East Coast than originally predicted, according to adjusted track guidance by the National Hurricane Center.
However, East Coast states still braced for more downpours over the weekend, with the cotton states of North and South Carolina and Virginia among those under states of emergency.
Volume slowed to an estimated 16,600 lots from 20,662 lots the previous session when spreads accounted for 6,331 lots or 31%, EFP 163 lots and EFS 166 lots. Options volume totaled 1,124 calls and 4,144 puts.
U.S. upland classing rose to 157,118 running bales during the week ended Thursday from the prior weekΆs 107,983 bales, according to data from USDAΆs Agricultural Marketing Service.
This brought the classing total for the season to 563,691 bales, down from 1.103 million bales a year ago. Tenderable cotton declined to 54.7% for the week from 64.3% the prior week and 64.7% for the season. A year ago, 68.6% classed for the season was tenderable.
Classing in Texas decreased to 87,193 bales from 95,627 bales to bring the seasonΆs total to 477,732 bales, down from 1.102 million bales at the corresponding point last year.
Some gins have completed operations in southern Texas and only limited harvesting has begun in the big West Texas Plains.
Separately, U.S. 2015-crop upland cotton under loan rose by 50,722 running bales to 120,945 during the week ended Monday, the latest USDA figures showed. All outstanding loans were Form G issued to marketing cooperatives or loan servicing agents.
On the global cotton scene, the International Cotton Advisory Committee raised its world ending stocks estimate by 1% from a month ago to 20.62 million metric tons or 94.71 million 480-pound bales.
ThatΆs still far below USDAΆs September world carryout forecast of 106.3 million bales, which was down 4.6 million bales or 4% from its estimate of beginning stocks.
Converted to statistical bales, the ICAC estimated world production at 109.5 million, up 1% on the month but down 9% from last season, with the 2015-16 cotton area projected down 7% to 31.1 million hectares or 76.85 million acres owing to significantly lower cotton prices in 2014-15.
The secretariat lowered the world cotton consumption forecast fractionally to 114.84 million bales, up 2% from 2014-15, with mill use growth seen remaining flat or slowing in many countries. World cotton trade was projected stable around 35 million bales.
Meanwhile, Commodity Credit Corp. Executive Vice President Val Dolcini announced the marketing assistance loan rate for 2016-crop base quality upland cotton will remain at 52 cents.
The base quality is color grade 41, leaf grade 4, staple length 1-1/16 inches, micronaire 3.5-3.6 and 4.3-4.9, strength 26.0-28.9 grams per tex and length uniformity of 80.0-81.9.
Futures open interest declined 422 lots Thursday to 188,193, with DecemberΆs down 482 lots to 122,442 and MarchΆs down 351 lots to 48,185. Cert stocks dropped 88 bales to 44,757.
