U.S. export commitments stand at 49% of USDA’s new and higher 2017-18 forecast and are up 2.05 million RB from a year ago. Slowed shipments likely hampered by tight supplies.
Cotton futures settled mixed Thursday, down 20 to up 22 points, with December completing an inside day with a marginal gain.
December settled up three points to 69.12 cents, around the upper third of its 102-point range from up 36 points at 69.45 to down 66 points at 68.43 cents. It traded to within a tick of the prior-day high and 12 points of the low.
March closed down seven points to 68.53 cents, in the upper half of its 88-point range from 68.86 to 67.98. October lost the most, settling at 69.78 cents.
Volume slowed to an estimated 21,771 lots from 39,602 lots the prior session when spreads accounted for 16,692 lots or 42% and EFP 24 lots. Options volume dropped to 9,668 lots (5,367 calls and 4,301 puts) from 11,960 lots (6,831 calls and 5,129 puts).
U.S. all-cotton export sales for shipment this season of 69,000 running bales during the week ended Sept. 7, down from 119,100 RB the prior week, brought 2017-18 commitments to 7.037 million RB.
The lead of commitments — outstanding sales of 6.052 million RB, including rollover of unshipped sales from last season — over total sales a year ago narrowed 79,000 RB to 2.046 million RB or to 41%. Commitments were 49% of the new and higher USDA export forecast, compared with 34% of final 2016-17 shipments at the corresponding point last season.
Sales for shipment next season slipped to 26,400 RB from 43,100 RB, bringing 2018-19 commitments to 679,700 RB, still up 265,000 RB from forward bookings a year ago.
All-cotton shipments slowed to 112,200 RB from 167,000 RB, likely hampered by tight available supplies amid storm disruptions and a shortage of high grades. Shipments for the season were 984,600 RB, 112,100 RB or 10% behind year-ago exports.
Shipments now need to average roughly 292,800 RB a week to reach the updated projection, while weekly sales averaging approximately 161,200 RB would match the export forecast.
The USDA boosted its export forecast by 700,000 statistical 480-pound bales to 14.9 million, similar to last season’s final shipments, despite expectations for increased export competition.
With domestic mill use unchanged at 3.35 million bales, exports are projected to account for all the expected increase to nearly 18.3 million bales in total U.S. demand, largest since a similar offtake in 2010-11.
Larger foreign import demand for raw cotton — supporting an above-average gain projected for world mill use — along with the larger U.S. crop is expected to keep U.S. exports at one of the highest on record.
As a share of world trade, U.S. cotton exports are projected to account for 39% of world exports, down slightly from last season. Global cotton trade is forecast at 37.8 million bales, slightly above a year ago but well below the record of 46.5 million bales exported in 2012-13.
Futures open interest edged up 54 lots to 243,940 on Wednesday, with December’s down 1,603 bales to 142,796 and March’s up 1,374 lots to 71,977. Certified stocks declined 352 bales to 6,654.