Traders digested reports that an additional 1.9 million bales may be offered in ChinaΆs auctioning of its government-owned stockpile. ChinaΆs imports for the calendar year through June reported up 48.3%.
Cotton futures finished higher in a light, narrow-range trading Tuesday, supported by the decline reported by USDA in U.S. crop conditions after the close Monday.
December gained 54 points to close at 68.83 cents, in the upper quarter of its 68-point range from unchanged at 68.29 to 68.97 cents. It had established the range for the day in the early going, touching its highest intraday price since June 21. December hasnΆt closed above tough resistance 69 cents since June 19.
March settled up 51 points to 68.56 cents, trading within a mere 43-point range between 68.24 and 68.67 cents. October closed up 51 points to 68.56 cents.
Volume totaled an estimated 13,356 lots, little changed from 13,251 lots the previous session when spreads accounted for 6,847 lots or 52%. Options volume rose to 3,419 lots (711 calls and 2,708 puts) from 1,873 lots (475 calls and 1,398 puts).
Traders digested reports that an additional 410,000 metric tons (about 1.9 million 480-pound bales) may be offered in ChinaΆs auctioning of government-held stocks.
This was seen as suggesting the daily auctions could be extended for another month through September, but an extension hasnΆt been confirmed by the China National Cotton Reserves Corp.
ChinaΆs imports are reported to have totaled 72,000 metric tons (330,690 bales) in June, about even with June year. This brought the total for the calendar year to 636,000 tons (2.92 million bales), up 48.3% from a year ago.
China has been a major import buyer of U.S. cotton this marketing year, which began last Aug. 1. Its 2016-17 purchases had totaled 2.335 million running bales as of July 13, according to the latest export report of USDAΆs Foreign Agricultural Service.
Mills in China, the worldΆs largest cotton consumer, use the higher quality U.S. cotton to blend with the lower quality stocks offered in the auctions. Stockpile sales through Friday had reached roughly 9.2 million statistical bales, sources said, reducing government-owned stocks to around 29.8 million bales.
China has expanded its mill use since 2014-15 and is forecast by USDA to account for nearly one-third of 2017-18 global cotton consumption. It is projected to consume 38 million bales in 2017-18, up 500,000 bales from 2016-17 and the highest since a similar amount was used in 2011-12.
Futures open interest dropped 160 lots Monday to 215,821, with DecemberΆs down 1,426 lots to 158,802 and MarchΆs up 1,183 lots to 39,123. Decertification of 1,409 bales reduced certified stocks to 42,307 bales. No cotton awaited review.
