Fresh export inquiries may have offered support. Talk of light March delivery notices circulated. Final bales awaited in Southeast. Few abnormally dry spots remained in the Delta. Southwest cotton made up 94% of weekΆs U.S. upland classing.
Cotton futures finished slightly higher within tight trading ranges Tuesday, completing an inside day in most-active May.
May settled up 14 points at 75.66 cents, in the middle of its 51-point range from up 40 points at 75.92 cents to down 11 points at 75.41 cents. It posted the high overnight and the low in morning dealings.
March closed up four points to 73.52 cents ahead of first notice day on Wednesday and July added 21 points to settle at 76.71 cents. December gained 40 points to finish at 74.16 cents.
Support coming out of the three-day weekend may have stemmed partly from fresh export inquiries following the steep price decline on Friday. Robust demand for U.S. cotton has pushed all-cotton 2016-17 export commitments as of Feb. 9 to 86% of the USDA forecast and 60% above bookings a year ago.
Volume slowed to an estimated 32,158 lots from 58,204 lots the prior session when spreads accounted for 30,969 lots or 53%, EFS 2,510 lots and EFP 1,772 lots. Options volume declined to 995 lots — 615 calls and 380 puts — from 12,408 lots.
Spread trading has been prominent heading into first notice day. The March-May switch traded as wide as 205 points carry last week and to a new high May premium of 214 points on Tuesday.
Talk has circulated that March deliveries may be light, with some certified stocks hedges possibly having been rolled forward. Big batches of mill on-call sales in March also apparently have been rolled or fixed.
The March open interest coming into Tuesday was 6,773 lots, down 12,679 lots. Notices are expected to be posted by Tuesday night.
On the crop scene, all gins now have finished 24-hour operations for the season in the lower Southeast, USDAΆs Agricultural Marketing Service reported in a weekly cotton review.
Reports indicated wet weather has continued to delay final picking of some scattered fields in Georgia. A few gins remained on gin days, awaiting the final harvest. Ginning also was mostly finished in the upper Southeast, though a few gins also waited on the last fields to be picked.
Recent rainfall has relieved drought conditions throughout most of the Delta. Abnormal dryness persisted, however, in a small area of southern Arkansas and in northern Mississippi.
Moisture remained scarce in the Texas Rio Grande Valley, traditional source of the nationΆs first new-crop supplies, and watering prior to planting continued. Windy conditions dried topsoil and rain was needed in the West Texas Plains.
Classing of 170,771 running bales of 2016-crop cotton from the Southwest made up 94% of the 182,242 RB of upland graded by USDA last week. The classing runs included 54,132 RB at Lubbock, 23,874 RB at Lamesa and 92,765 RB at Abilene from West Texas (62,468), Oklahoma (216,610) and Kansas (3,687).
Futures open interest fell 11,471 lots Friday to 263,793, with MayΆs down 421 lots to 159,276, JulyΆs up 292 lots to 50,142 and DecemberΆs up 1,191 lots to 41,147. Cert stocks grew 438 bales to 315,884. Awaiting review — updated through Monday — were 5,796 bales — 3,392 at Dallas-Fort Worth, 1,109 at Galveston and 1,295 at Memphis.
