March hit new contract low. Weekly classing dwindled to 55,313 bales. Tenderable cotton appeared on track to rank as the second lowest in 20 years. Planting expected to expand in March in the Rio Grande Valley. Light volume of contracting reported in the Delta.
Cotton futures tumbled from early gains to close in the red Monday, with most-active May making an outside-range reversal to the downside.
- May closed down 85 points to 58.69 cents, reversing from a 62-point gain at 60.16 cents to down 94 points at 58.60 cents. It climbed above the prior-session high before falling below last week’s low and closing within five ticks of its contract low finish.
- With first notice day looming on Tuesday, March dived 261 points to a new contract low at 57.40 cents and closed down 227 points at 57.74 cents, near the low of its 325-point plunge from the session high at 60.65. March notices are expected to be posted by early Monday night.
- July dropped 68 points to close at 59 cents and December fell 64 points to settle at 58.92 cents.
- Volume slowed to an estimated 37,375 lots from 26,713 lots the previous session when spreads accounted for 14,475 lots or 54%, block trades 500 lots and EFP 12 lots. Options volume totaled 1,493 calls and 1,077 puts.
U.S. classing of 2015-crop upland cotton dwindled to 55,313 running balesduring the week ended Thursday from 106,366 RB the previous week, according to the latest USDA figures.
With 99% of the estimated crop now classed and tenderable cotton for the season at 55.4%, the percentage meeting requirements for tendering on futures appeared on track to rank as the second lowest in 20 years.
The lowest was 52.0% in 2002 and the highest was 74.6% in 2003. Tenderable cotton totaled 70.1% in 2014, 64.4% in 2013, 61% in 2012, 70.2% in 2011 and 67.2% in 2010.
Classing for the season inched up to 12.026 million RB of upland last week and remained at 415,508 RB for Pima. No extra-long staple cotton has been classed the last two weeks. The all-cotton count reached 12.441 million RB, down 21% from the final 2014 crop estimate converted to running bales.
Limited planting was underway in the Texas Rio Grande Valley and was expected to expand the first week of March, the USDAΆs Agricultural Marketing Service reported in a weekly cotton review.
Timely rainfall was needed to improve surface moisture. Producers in East Texas were encouraged with subsoil moisture but will need a planting rain to ensure germination.
Industry reports indicated some sorghum acres are expected to be switched to cotton in the West Texas Plains and result in a slight increase in the fiber crop acreage.
A light volume of forward contracting was reported in the Delta. Up to 4 inches of rain fell throughout the North Delta. Fields that had been drying out were saturated again in localized areas. Up to 2 inches of locally heavy rainfall fell in the South Delta.
Sunny, unseasonably warm conditions prevailed in in the Desert Southwest. The last measurable rainfall in Central Arizona was Jan. 31.
A storm brought a tenth to one-half of an inch of rainfall late in the reporting week in the San Joaquin Valley. Snow fell in the Sierra Nevada Mountains, adding to the snowpack. The snow will greatly benefit reservoirs in the coming spring.
Futures open interest dropped 547 lots Friday to 188,701, with MarchΆs down 3,366 lots to 4,983 and MayΆs up 1,854 lots to 115,802. Cert stocks grew 1,075 bales to 61,538. Awaiting review were 3,500 bales.
