U.S. 2013-14 export commitments reached 87% of the USDA estimate. Sales and strong shipments reinforced expectations for a boost in the USDA export forecast and a cut in the carryout estimate.
Cotton futures finished higher for the third session in a row Thursday after weekly export sales and shipments reinforced expectations for a reduction in the U.S. carryout forecast.
Spot March closed up 79 points to 86.31 cents, its highest finish since Jan. 24 and just above the midpoint of its 91-point range from up 26 points at 85.78 to up 117 points at 86.69 cents.
May gained 84 points to 86.92 cents, July rose 83 points to 86.47 cents and December edged up 29 points to 77.23 cents.
Volume increased to an estimated 24,300 lots from 19,790 lots the previous session when spreads totaled 12,458 lots or 63%, block trades 1,000 lots, EFS 88 lots and EFP 46 lots. Options volume totaled 4,193 calls and 2,817 puts.
Net all-cotton export sales of 179,500 running bales for 2013-14 — far above the average needed to meet the USDA forecast — during the week ended Jan. 30 lifted commitments to 8.872 million bales.
The sales narrowed the margin behind exports a year ago by 55,000 bales to 1.299 million and boosted commitments to 87% of the USDA export estimate. A year ago, commitments were 80% of final 2012-13 shipments.
Commitments are about 13% behind total sales a year ago, compared with the USDA estimate for a decline in exports of about 19%.
All-cotton shipments hit a new marketing year high for the second week in a row, climbing to 382,500 running bales and hiking exports for the season to 4.358 million.
Shipments trailed year-ago exports by 728,000 bales or 14% but were 43% of the USDA forecast, against 40% of final shipments at the corresponding point last season.
To achieve the USDA projection, shipments need to average roughly 233,000 running bales a week, while sales averaging approximately 53,000 RB for the next 25 weeks would match the estimate.
All-cotton sales for shipment next season of 36,000 running bales brought 2014-15 commitments to 455,100 RB, narrowing the gap behind total forward bookings a year ago to 140,500 bales.
The USDA is expected to boost its 2013-14 export estimate by 300,000 to 500,000 bales in its updated supply-demand estimates on Monday and reduce the carryout by a corresponding amount.
Cotton traders and others, meantime, will look at the January employment report on Friday for any indication as to whether the December report was an outlier or the start of a trend.
Futures open interest fell 2,094 lots Wednesday to 174,081, with MarchΆs down 3,073 lots to 77,681 and MayΆs up 277 lots to 50,911.
Certificated stocks grew 8,854 bales to 187,606. There were 9,382 newly certified bales, 528 bales decertified and 2,330 bales awaiting review.
World values as measured by the Cotlook A Index were unchanged Thursday morning at 92.30 cents. The index premium to WednesdayΆs March futures settlement narrowed 12 points to 6.78 cents.
