Rolling by index funds Looms. Final classing data showed 61% of U.S. 2012-13 output met tenderable futures requirements, lowest since 2002.

Cotton futures closed lower amid bearish spread action Wednesday, finishing in the red for the seventh consecutive session in spot July.

Most-active July lost 72 points to close at 80.70 cents, near the low of its 110-point range from up 29 points at 81.71 to down 81 points at 80.61 cents. This was its lowest close since Jan. 25.

December dropped 56 points to settle at 83.38 cents, also near the low of its 98-point range from up 33 points at 84.27 to down 65 points at 83.29 cents. Its discount to March widened to a settlement difference of 45 points.

The market braced for the rolling by index funds from July to December. This will begin on Thursday with the Rogers fund and finish June 13 with the Goldman Sachs roll, an analyst noted. Trend-following funds already have done some rolling and commercials also have moved some of their hedges. First notice day for July deliveries is June 24.

Volume increased to an estimated 24,500 lots from 23,428 lots the previous session when spreads totaled 11,435 lots or 49%, EFP 476 lots and EFS 8 lots. Options volume totaled 7,618 calls and 3,562 puts.

An annual USDA crop quality review late last week showed 61% of the 2012-13 U.S. upland output net requirements for delivery on futures contracts, lowest such percentage since 2002.

The USDA classed 16,052,210 upland samples and 750,759 Pima samples through May 2 for an all-cotton total of 16,802,969. Ginning totaled 16,833,750 running bales, including 16,083,750 bales of upland and 750,000 of Pima, according to an annual summary released May 10.

Color grade 41 (strict low middling) was the predominant color of upland, compared with color grade 31 (middling) the previous year. All white color grades accounted for 92%, up from 91% in 2011, while light spots comprised 7%, down from 8%. Spotted, tinged, yellow stained and below grades made up about 1%.

Leaf grade 3 was the predominant leaf at 41% of upland classing, against 40% a year earlier. Leaf grades 1 and 2 comprised the next highest percentages at 26%, against 31% a year ago, while 4 rose to 25% from 22% and 5 dipped to 7% from 6%.

Upland staple lengths averaged 35.7 thirty-seconds of an inch, up slightly from 35.5 a year ago, with 36 the predominant length at 32%, up from 26% in 2011. Staples 32 and shorter comprised 3%, staple 33, 4%; staple 34, 10%; staple 35, 23%; staple 37, 23%; staple 38, 4%; and staple 39 and longer, 2%.

Micronaire of upland averaged 4.5, same as last year, with mike readings of 2.9 and lower at 1%; 3.0-3.2, 2%; 3.3-3.4, also 2%; 3.5-3.6, 3%; 3.7-4.2, 17%; 4.3-4.9, 55%; and 5.0 and higher, 20%. For the 2011 crop, 4.3-4.9 was 60%.

Upland fiber strength averaged 29.9 grams per tex, down slightly from 30.0 a year ago, with 25 gpt accounting for 1%; 26-27, 11%; 28-29, 31%; 30-31, 35%; 32-33, 17%; and 34 and higher, 5%.

Futures open interest expanded 1,370 lots Tuesday to 186,279, with JulyΆs down 1,271 lots to 110,999 and DecemberΆs up 2,190 lots to 69,422.

Certificated stocks grew 329 bales to 509,943. There were 11,675 bales awaiting review.

World values as measured by the Cotlook A Index were steady at 90.10 cents Wednesday morning. The index premium to TuesdayΆs July futures settlement widened seven points to 8.68 cents.