Cotton Retreats to Lowest Close Since Aug. 11
Fed left interest rates unchanged. U.S. cotton export commitments reached 2.978 million running bales, 30% of USDAΆs 2015-16 forecast. Exports for the season totaled 710,000 RB, narrowing the lead over shipments a year ago to 102,100 RB.
Cotton futures retreated after pushing above highs of the previous two sessions Thursday and settled at the lowest close in benchmark December since Aug. 11.
December closed down 31 points to 62.40 cents, near the low of its 91-point range from up 50 points at 63.21 to down 41 points at 62.30 cents. Thinly traded October closed down 55 points to 61.83 cents, widening its discount to December, and March dipped 20 points to settle at 62.22 cents.
U.S. dollar index futures fell to a new session low against a basket of currencies after the Federal Reserve kept interest rates unchanged amid concerns about a weak world economy. The Fed left open the possibility of modest policy tightening later this year.
Volume slipped to an estimated 12,400 lots from 12,848 lots the previous session when spreads accounted for 3,442 lots or 27%, EFS 52 lots and EFP 41 lots. Options volume totaled 1,393 calls and 703 puts.
U.S. all-cotton export sales for shipment this season of 100,600 running bales during the week ended Sept. 10, up from 90,100 bales the previous week, brought 2015-16 commitments to 2.978 million RB.
The gap behind year-ago commitments narrowed by 20,600 bales to 2.181 million RB, which was 30% of the latest USDA forecast, compared with 47% of final 2014-15 exports at the corresponding point last season.
Upland sales of 96,600 RB went to 13 countries (corrected), including 25,500 bales to Vietnam, 23,700 to Mexico, 23,600 to Turkey, 12,300 to Indonesia and 6,700 to Peru. Japan canceled 1,500 bales. Sales were at the upper end of the range of some expectations.
All-cotton shipments of 66,400 RB, down from 144,300 the previous week, nudged exports for the season up to 710,000 RB. The lead over exports a year ago narrowed by 102,100 RB to 144,200.
The slowdown in shipments was attributed partly to tight availability of specified high grades amid a slow harvest and to the Labor Day holiday.
Exports were distributed among 20 countries, with upland shipments of 59,400 RB led by 10,400 to Mexico, 10,200 to South Korea, 6,900 to Thailand and 6,600 to Indonesia.
To achieve the USDA forecast, shipments need to average roughly 195,400 RB a week, while sales averaging approximately 147,200 RB are required to match the export projection.
The USDAΆs September export forecast of 10.2 million statistical 480-pound net weight bales or 9.894 running bales is up 200,000 SB from the August forecast but still is the lowest since 2000-01.
U.S. exports are expected to account for about 30% of global cotton shipments, a share that is between that of 2013-14 and 2014-15.
New-crop weekly sales of 14,500 RB, down from 18,900 the previous week, hiked 2016-17 commitments to 205,000 RB, narrowing the margin behind forward bookings a year ago to 193,900 RB.
Futures open interest declined 1,071 lots Wednesday to 176,347, with DecemberΆs down 987 lots to 117,922 and MarchΆs down 115 lots to 44,765. Certificated stocks dropped 2,109 bales to 53,798.
