December gained 184 points for the week. IndiaΆs 2017-18 cotton crop reported projected at the equivalent of 29.6 million 480-pound bales by the CAI, compared with USDAΆs forecast of 29 million. Mills boosted their unpriced on-call position to a total of 100,535 lots.
Cotton futures gave back a slice of the prior dayΆs gain Friday, with December bouncing off a three-session low to close just above midrange.
December settled down 56 points to 68.42 cents, trading within a 169-point range from up 22 points at 69.20 to down 147 points at 67.51 cents. It gained 184 points for the week, still below the identical weekly settlements of 68.59 on July 7 and June 30.
March closed down 49 points to 68.11 cents, up 200 points for the week, also a little above the midpoint of its 157-point range from 68.80 — three ticks above ThursdayΆs high — to 67.23 cents. October settled down 41 points to 69.14 cents, up 196 points for the week.
Volume quickened to an estimated 22,995 lots from 17,467 lots the previous session when spreads accounted for 4,019 lots or 23%. Options volume dipped to 2,718 lots (1,492 calls and 1,226 puts) from 2,833 lots (979 calls and 1,854 puts).
Reports that the Cotton Association of India projected IndiaΆs 2017-18 production at the equivalent of 29.6 million 480-pound bales weighed on market sentiment, analysts said.
The USDAΆs latest crop forecast for the worldΆs largest cotton producer is 29 million bales, up 7% from its estimate for 2016-17 of 27 million. The USDA raised its 2017-18 forecast a million bales this month and upped its estimate for 2016-17 by 500,000 bales.
India is expected to produce 25% of the world cotton crop in 2017-18, according to USDA estimates. Although the yield is forecast lower (near the five-year average), a cotton area rebound of 14% is expected to push the 2017-18 crop to the highest in three years, USDA says.
Global cotton production remains concentrated among a handful of countries. In 2017-18, the top five cotton-producing countries are forecast to account for more than 76% of total production, similar to last season but slightly below the 2013/14-2015/16 average. China and the United States are forecast to contribute 21% and 16.5%, respectively.
The world cotton harvested area is projected to rise 10% from the 30-year low in 2016-17 to 80.1 million acres. The yield is forecast at 691 pounds per acre, 2% below a year earlier.
Meanwhile, the unpriced on-call futures position of mills rose by a net board total of 6,236 lots or 623,600 bales last week, a period when the December contract tested the June low.
The unfixed mill position rose to 100,535 lots or 10.053 million bales, according to the call report released by the Commodity Futures Trading Commission after the closed Thursday. This compared with 70,395 lots a year ago.
Producers added 497 lots to hike their unpriced position to 35,988 lots, up from 25,199 lots last year. The net call difference increased 5,739 lots to 64,547, 29.8% of the rising open interest.
In December, mills priced 516 lots to trim their unpriced position to 32,372 lots, while producers added 58 lots to nudge theirs up to 22,899 lots.
Futures open interest increased 875 lots to 217,465 on Thursday, with DecemberΆs up 259 lots to 162,702 and MarchΆs up 592 lots to 36,755. Certified stocks declined 1,313 bales to 46,529.
