May held inversion over July. All-cotton export commitments stand at 73% of the USDA estimate and shipments at 40%. AWP little changed as U.S. premium narrowed.
Cotton futures meandered within the overnight range in most-active May, surviving an early test of the prior day’s contract low, and settled modestly ahead amid oversold momentum readings Thursday.
- May closed up 35 points to 57.76 cents, around the middle of its 92-point range from 57.27 to 58.19 cents. It dipped to within a tick of the contract low in the first 10 minutes of overnight trading, revisited that area on the heels of USDAΆs weekly export sales report, worked up to a post-report high of 57.89 and chopped back and forth into the close.
- Maturing March settled up 46 points to 58.16 cents, July closed up 27 points to 57.61 cents and December finished up 20 points to 57.40 cents. May, which maintained an inversion over July for a second day, climbed in the wee overnight hours above WednesdayΆs high and closed in the green for the first time in five sessions.
- Volume slowed to an estimated 20,054 lots from 27,938 lots the prior session when spreads accounted for 11,524 lots or 41% and EFP 15 lots. Options volume totaled 5,708 calls and 5,227 puts.
Net U.S. all-cotton export sales for shipment this season of 121,400 running bales during the week ended Feb. 18, down from a marketing year high of 318,900 RB the previous week, brought 2015-16 commitments to 6.771 million RB.
Commitments trailed year-ago bookings by 2.905 million RB or by 30% and were 73% of the USDA export forecast. A year ago, commitments were 89% of final 2014-15 shipments.
Net sales for shipment next season of 18,700 RB, up from 12,100 RB the week before, raised 2016-17 commitments to 919,300 RB. The lead over forward bookings a year ago narrowed by 47,300 RB to 203,200 RB.
All-cotton shipments of 180,500 RB, up from 195,500 RB the week before, boosted the total for the season to 3.642 million RB.
Exports lagged year-ago shipments by 712,000 RB or by 16%. Shipments were about 40% of the USDA projection, about the same as the percentage of final 2014-15 exports at the corresponding point last season.
To achieve the USDA forecast, shipments need to average roughly 242,300 RB per week, while sales averaging around 106,300 RB would match the export forecast. Some 2015-crop cotton will be needed to meet 2016-17 commitments early next season prior to volume movement of the new crop.
On the competitive-pricing scene, the average of the five lowest-quoted world growths for the Far East eased off three points to 64.41 cents during the week ended Thursday, according to USDA, while the lowest-priced U.S. cotton landed there dipped 40 points to 66.95 cents.
The U.S. premium thus narrowed 37 points to 2.54 cents. The adjusted world price for the program week ahead, reflecting transportation and quality differentials, is 44.66 cents, resulting in a little changed marketing loan gain of 7.34 cents. The fine count adjustment for 2015-crop cotton better than 31-3-35 remains at nine points.
Futures open interest expanded 5,310 lots Wednesday to 193,307, with MarchΆs down 65 lots to 478 and MayΆs up 3,510 lots to 121,069. Cert stocks were unchanged at 62,654 bales. Awaiting review were 9,442 bales at Memphis.
