U.S. export commitments now total nearly 101% of the new USDA forecast and shipments have reached 87%. Strong demand beyond China reported for U.S. cotton.
Cotton futures rallied from overnight losses to extend a strong advance and close near session highs on huge volume Thursday.
Spot July gained 166 points to close at 91.72 cents, 10 ticks off the high of its 339-point range from down 163 points at 88.43 cents to up 176 points at 91.82 cents. This was the highest close since March 15.
December gained 108 points to settle at 89.15 cents, also just off the high of its 285-point range from down 164 points at 86.43 cents to up 121 points at 89.28 cents. It closed above midway between its lifetime high-low.
Volume jumped to an estimated 74,500 lots from 61,599 lots the previous session when spreads totaled 30,307 lots or 49%, block trades 3,832 lots, EFS 1,066 lots and EFP 209 lots. Options volume totaled 22,107 lots — 15,253 calls and 6,854 puts.
U.S. all-cotton commitments for 2012-13 climbed to 13.293 million running bales during the week ended June 6, USDA reported. These are 228,000 bales ahead of commitments a year ago.
Commitments now total nearly 101% of the latest USDA export projection, compared with 115% of final shipments at the corresponding period last season. About 86% of the commitments have been shipped, against 75% a year ago.
All-cotton shipments reached 11.449 million running bales, up 17% or 1.657 million bales from exports a year ago. Shipments have reached about 87% of the USDA forecast, close to the 86% of final exports a year ago.
New-crop commitments totaled 1.856 million running bales, up 32,000 bales from year-ago forward bookings. These are 18% of the downwardly revised 2013-14 forecast. A year ago, forward bookings were 14% of the current 2012-13 export estimate.
While U.S. cotton exports to China have eased over the last 10 months, shipments to other countries have jumped by more than 50% for a variety of reasons, according to USDA analysts.
Weaker competition because of tighter available global supplies, especially from India, has shifted import demand to the United States from such large markets as Pakistan and Vietnam.
And smaller crops in some other key producing countries, such as Turkey and Pakistan, have supported demand for additional U.S. supplies to meet growing consumption.
In Southeast Asia, strong demand for U.S. cotton has been triggered by rising Asian demand for textiles produced by Indonesia, Thailand and Vietnam. Because domestic production supplies only about 5% of consumption, those countries are highly dependent upon imports.
Tightening exportable supplies from Brazil and Australia have provided an opportunity to ship additional U.S. cotton to Southeast Asian markets in the later months of the marketing year, USDA says.
Futures open interest expanded 3,330 lots Wednesday to 190,205, with JulyΆs down 8,979 lots to 58,643 and DecemberΆs up 11,391 lots to 120,265.
Certificated stocks grew 2,558 bales to 533,670. There were 2,654 newly certified bales, 96 bales decertified and 24,274 bales awaiting review.
World values as measured by the Cotlook A Index gained 250 points Thursday morning to 95.60 cents. The index premium to WednesdayΆs July and December futures settlements widened 50 points to 5.54 cents and narrowed 39 points to 7.53 cents, respectively.
