Switch trading remained heavy. U.S. 2015-16 all-cotton export commitments stand at 69% of USDA’s revised February forecast, while shipments reached 35%.
Cotton futures settled lower on another round of huge volume Thursday, with soon-to-mature March settling about midrange after hitting a new contract low.
- March closed down 46 points to 58.42 cents, edging above WednesdayΆs high to a 15-point gain at 59.03 in overnight dealings and falling to a 103-point loss to its new low at 57.85 cents in the early morning.
- May finished down 52 points to 58.71 cents, July settled down 50 points to 59.31 cents and December closed down 54 points to 59.58 cents.
- Intensified concerns in outside markets about global economic weakness weighed on cotton sentiment.
- March-May switch trading remained heavy, estimated at a whopping 19,836 lots, with March inverting over May at one point but settling at a narrowed carry. March options expire Friday. Futures open interest in March fell below MayΆs OI for the first time on Wednesday.
- Volume totaled an estimated 74,454 lots, up from 62,809 lots the previous session when spreads accounted for 44,815 lots or 71%, EFS 1,245 lots and EFP 109 lots. Options volume totaled 5,699 calls and 4,995 puts.
Net U.S. all-cotton export sales of 240,800 running bales during the week ended Feb. 4 for shipment this season, down from 262,400 RB the previous week, brought 2015-16 commitments to 6.331 million RB.
The gap behind year-ago commitments narrowed by 175,000 RB to 3.328 RB or to 35% and amounted to 69% of USDAΆs downwardly revised February forecast. A year ago, commitments were 89% of final 2014-15 shipments.
All-cotton exports of 195,500 RB, down from 244,700 RB the week before, boosted shipments for the season to 3.272 million RB. Shipments trailed year-ago exports by 582,000 RB or 15%.
Shipments reached about 35% of the USDA forecast, about the same as the year-ago percentage of final 2014-15 exports. Weekly shipments averaging roughly 237,700 RB would achieve the estimate, while sales of around 115,400 RB would match the export forecast.
Sales for shipment next season of 53,700 RB, up from 6,800 RB the prior week, raised 2016-17 commitments to 888,600 RB. This widened the lead over forward sales a year ago to 227,000 RB.
On the competitive-pricing front, the average of the five lowest-quoted growths for the Far East fell 176 points to 64.84 cents during the week ended Thursday, according to USDA, while the lowest-priced U.S. cotton landed there dropped 220 points to 68.05 cents.
The U.S. premium thus narrowed 44 points to 3.21 cents. The adjusted world price for the program week ending next Thursday is 45.09 cents, down from 46.85 cents this week, resulting in a corresponding marketing loan gain to 6.91 cents.
The fine count adjustment for qualities better than 31-3-35 — reflecting differences between premiums in the U.S. and international markets — is 0.16 of a cent for 2015-crop cotton.
Futures open interest expanded 4,925 lots Wednesday to 205,133, with MarchΆs down 8,803 lots to 67,115 and MayΆs up 10,805 lots to 78,937. Cert stocks grew 1,231 bales to 29,129.
