May gained 5.8% for the month. Another round of healthy U.S. weekly export sales generally expected, though some looking for a drop from the prior week. China’s imports last month rose by 16.4% from a year ago.
Cotton futures settled mixed Wednesday, up 68 points to down 13 points in traded contracts, with benchmark May up the most, as traders awaited the U.S. weekly export sales report.
May settled at 82.93 cents, its highest close since Jan. 22 and near the high of its 125-point range from down 45 points at 81.80 to up 80 points at 83.05 cents. It gained 457 points or 5.8% for the month.
Maturing March closed down 11 points to 81.65 cents, July finished up 50 points to 83.29 cents and December edged up six points to 77.11 cents after hitting another new contract high at 77.50 cents. The last trading day for March is next Wednesday.
Volume increased to an estimated 34,200 lots from 26,364 lots the prior session when spreads accounted for 9,703 lots or 37%, EFS 177 lots and EFP 35 lots. Options volume quickened to 13,386 lots (9,043 calls and 4,343 puts) from 7,036 lots (2,674 calls and 4,362 puts).
The USDA’s export report on Thursday is generally expected to show another round of healthy sales after those of the prior week topped expectations for the umpteenth time this season.
Still, some traders expect net upland sales for the week ended Feb. 22 to slow from the prior week’s 399,100 running bales, which were up 40% from the previous four-week average. Prices during that latest reporting week ranged from 76.47 to 80.52 cents, basis May, hitting the highest intraday price at the time since Feb. 1.
The four-week average of net upland sales is 367,400 RB. All-cotton commitments are within roughly 681,000 RB of the USDA export estimate. Upland shipments the last four weeks have averaged 348,900 RB. Movement of a backlog of Texas High Plains cotton booked for export has been hampered by short truck and rail supply availability, sources said.
China, the leading export customer of U.S. cotton thus far this season, imported 133,747 metric tons of cotton (614,289 480-pound bales) in January, up 33.7% from the prior month and 16.4% from a year ago, according to custom figures released earlier this week.
Imports for the first six months of the 2017-18 marketing year have totaled 560,536 tons (2.574 million bales), 51% of the latest USDA forecast. Through Feb. 15, China had booked 2.33 million statistical bales of U.S. cotton for shipment this season, 17% of the sales to all destinations.
China is scheduled to resume its auctioning of government-held stocks in March. While sales in 2017-18 are expected to be well below last season’s 14.3 million bales, government stocks are projected to fall to the lowest since a price support program backed by purchases for the national reserve was introduced in 2011.
Futures open interest increased 198 lots to 259,538 on Tuesday, with March’s down 18 to 113, May’s down 1,041 lots to 128,903 and July’s up 1,041 lots to 58,126. Certified stocks grew 234 bales to 103,640. Awaiting review were 437 bales at Galveston.
