Cotton Skids to Triple-Digit Losses

U.S. 2015-16 all-cotton export commitments amounted to nearly 50% of USDAΆs new export forecast. Weekly marketing loan gain figured at lowest since Aug. 21.

U.S. cotton futures fell amid an overbought technical vulnerability to triple-digit nearby losses on the heels of weaker-than-expected weekly export sales Thursday.

Spot March closed down 104 points to 63.77 cents, in the lower quarter of its 126-point range from up three points at 64.84 cents to down 123 points at 63.58 cents. It was its lowest finish since Dec. 2.

May settled down 101 points to 64.55 cents and December 2016 closed down 67 points to 65.23 cents.

Volume was estimated at 29,140 lots, compared with 29,994 lots the previous session when spreads accounted for 9,902 lots or 33%, EFP 13 lots and EFS 10 lots. Options volume totaled 1,750 calls and 1,513 puts.

Net U.S. all-cotton export sales for shipment this season of 85,500 running bales during the week ended Dec. 3, down from the marketing year high of 289,500 RB the previous week, brought 2015-16 commitments to 4.821 million RB.

Commitments trailed year-ago bookings by 2.18 million RB or by 31% and amounted to nearly 50% of USDAΆs December export forecast. A year ago, commitments stood at 64% of final exports.

The USDA export forecast is down 11% from 2014-15 and would be the lowest shipments to foreign customers since 2000-01. Exports are expected to account for 73% of the total offtake of U.S. cotton, with domestic mills contributing the remainder.

All-cotton shipments increased to 115,300 RB from 90,800 RB the previous week, boosting exports for the season to 1.856 million RB. The lead over year-ago shipments narrowed to 99,400 RB.

Shipments have reached about 19% of the USDA estimate, compared with about 16% of final exports at the corresponding point last season.

To achieve the USDA projection, shipments need to average roughly 230,700 RB a week, while weekly sales averaging approximately 143,500 RB would match the export forecast.

Sales for shipment next season of 44,000 RB, up from the prior weekΆs 2,600 RB, hiked 2016-17 commitments to 683,200 RB, up from forward bookings a year ago of 505,400 RB.

On the competitive-pricing scene, the average of the five lowest-quoted growths for the Far East gained 109 points to 68.79 cents during the week ended Thursday, according to USDA calculations, while the lowest-priced U.S. cotton landed there rose 105 points to 74.80 cents.

The U.S. premium thus narrowed four points to 6.01 cents. The adjusted world price for the program week ahead is 49.04 cents, up from this weekΆs 47.95 cents. This results in a decline in the marketing loan gain to 2.96 cents, lowest since the week that began Aug. 21.

The fine count adjustment for 2015-crop qualities better than 31-3-35 is figured at 1.06 cents for this next week.

Futures open interest expanded 5,303 lots Wednesday to 197,084, with MarchΆs up 3,741 lots to 146,818 and MayΆs up 633 lots to 27,926. Cert stocks declined 176 bales to 65,126.