Mills priced 2,985 on-call lots in July last week to reduce their unfixed position there by 22.3%. Cotton Outlook forecasts continued rise in world stocks.
Cotton futures settled modestly lower for the session and mixed for the week in subdued dealings Friday.
Most-active December touched the session high in the late going and finished with a fractional five-point loss at 77.08 cents, in the upper third of its 90-point range from down 73 points at 76.40 to up 17 points at 77.30 cents.
July settled down 20 points to 88.16 cents, in the upper half of its 171-point range from up 41 points at 88.77 in overnight trading to off 130 points at 87.06 cents.
For the week, July gained 118 points and December dropped 67 points. December has lost ground two weeks in a row and in six of the last seven. The inverted July-December spread widened 185 points for the week to settle at 1,108 points.
Volume slowed to an estimated 19,800 lots — smallest since May 21 — from 28,162 lots the previous session when spreads totaled 13,309 lots or 47%, block trades 1,000 lots, EFP 646 lots and EFS 205 lots. Options volume totaled 1,777 calls and 1,569 puts.
Mills priced 2,985 on-call lots in July last week to reduce their unfixed position there by 22.3% to 10,429 lots, still a large number to be fixed prior to first notice day. The unfixed mill position likely contributed to this weekΆs volatile July price action.
Producers priced 266 lots to cut their small July holdings to 861 lots, according to the latest call data released by the Commodity Futures Trading Commission after the close Thursday.
The net call difference declined by 2,719 lots to 9,568, which was 21.4% of JulyΆs falling open interest, up from 15.3% a week earlier.
In December, producers added 2,126 lots for later pricing and mills added 697 lots, hiking their unfixed positions there to 21,248 and 13,460 lots, respectively. This widened the net call difference by 1,429 lots to 7,788, which amounted to 6.7% of DecemberΆs rising open interest, down from 7.4% the week before.
Meanwhile, Cotton Outlook has raised its 2013-14 world production estimate by 140,000 metric tons from a month ago to 25.6 million (117.58 million bales). The biggest increases were 85,000 tons to 6.545 million (30.06 million bales) for India and 50,000 tons to 1.675 million (7.69 million bales) for Brazil.
The consumption forecast fell 90,000 tons to 23.299 million (107.01 million bales), mainly on an 80,000-ton cut to 7.62 million (35 million bales) for China.
As a result, the production surplus is estimated at 2.301 million tons (10.57 million bales), up from 2.071 million (9.51 million bales) forecast last month.
Global 2014-15 production prospects fell by a net 2,000 tons to 25.226 million (115.86 million bales), with reductions for China and Uzbekistan largely offset by an increase for the United States.
Consumption for next season held steady on the month at 24.075 million tons (110.58 million bales), indicating a projected rise in world 2014-15 stocks of 1.151 million tons (5.28 million bales).
Futures open interest fell 4,709 lots Thursday to 163,108, with JulyΆs down 7,491 lots to 18,560 and DecemberΆs up 2,192 lots to 123,938. Cert stocks grew 6,270 bales to 433,997. There were 7,114 newly certified bales, 844 bales decertified and 21,666 bales awaiting review.
World values as measured by the Cotlook A Index fell 225 points Friday morning to 91.45 cents. The premium to ThursdayΆs July futures settlement widened 54 points to 3.09 cents.
Forward A Index values for 2014-15 eased 10 points to 84.35 cents, narrowing the discount to the 2013-14 index by 215 points to 7.10 cents and the premium to ThursdayΆs December futures close by four points to 7.22 cents.
