Market showed ho-hum reaction after USDA’s supply-demand estimates raised the U.S. carryout by 100,000 bales from the December forecast and cut world ending stocks by 1.53 million bales.
U.S. cotton futures finished with small gains Tuesday in a ho-hum reaction after USDAΆs updated supply-demand estimates upped the domestic carryout and cut world ending stocks.
- Spot March eked out a nine-point gain to close at 61.59 cents, in the lower quarter of its 83-point range from down five points at 61.45 to up 78 points at 62.28 cents. It set the dayΆs trading range prior to the USDA reports, matching MondayΆs high after posting the session low in the early minutes of overnight dealings.
- May closed up 20 points to 62.16 cents, while December edged up 10 points to settle at 62.86 cents.
- Volume slipped to an estimated 30,535 lots from 31,802 lots the previous session when spreads accounted for 12,709 lots or 39% and EFP seven lots. Options volume totaled 2,012 calls and 1,421 puts.
U.S. all-cotton production is estimated at 12.943 million bales, down 88,000 bales or less than 1% from the December forecast and 20.7% from last yearΆs output.
The export forecast was unchanged on the month at 10 million bales, while domestic mill use fell 100,000 bales to 3.6 million based on spinning activity through November. Ending stocks are forecast at 3.1 million bales, up from 3 million projected last month but down from beginning stocks of 3.7 million.
The USDA cut the plantings estimate by 25,000 acres from its earlier tally to 8.581 million and reduced the harvested area by 72,000 acres to 8.077 million. This hiked abandonment to 504,000 acres or 5.87% from 407,000 acres or 4.76%.
Estimated yields edged up to 769 pounds from 768 pounds but were down from 838 pounds last year and the five-year average of 829 pounds.
Upland production is estimated at 12.508 million bales, down from the December forecast of 12.58 million. Yields are pegged at 758 pounds an acre, up three pounds from a month ago but down 68 pounds from 2014. Record high yields are estimated in Kansas, Oklahoma and Tennessee.
Plantings of upland are estimated at 8.422 million acres and the harvested area at 7.922 million acres, down 22% and 13%, respectively, from last year.
By regions, upland production fell from the December forecasts by 27,000 bales to 3.816 million in the Southeast, 10,000 bales to 2.042 million in the Mid-South, 27,000 bales to 6.147 million in the Southwest and 8,000 bales to 503,000 in the West. Pima production declined 16,000 bales from the September forecast to 435,000, down 23% from last year.
All-cotton ginned prior to Jan. 1 totaled 11,094,200 running bales, compared with 14,213,650 RB through the corresponding period last season.
Cottonseed production, based on a three-year average lint-seed ratio, is expected to total 4.15 million tons, down 19% from last year.
The forecast range for the marketing year average price received by producers was narrowed a cent on each end from last month to 57 to 61 cents, leaving the midpoint unchanged at 59 cents.
Globally, USDA cut production on the month by 2.15 million bales or 2.1% to 101.56 million and shaved mill use slightly by 450,000 bales or 0.40% to 110.94 million. Ending stocks fell 1.53 million bales or 1.46% to 102.86 million, down 9.21 million bales or 8.2% from beginning stocks.
The production estimate reflected updated harvest reports for Pakistan, China, India and Turkmenistan. PakistanΆs crop fell 800,000 bales to 7.2 million, lowest since 1998, as falling gin arrivals indicated more extensive whitefly damage than previously expected. Consumption declined for India, Pakistan and the United States.
Imports rose by 720,000 bales to 36.07 million, virtually all in Pakistan, while exports were raised for India and others.
Outside China, world stocks are expected to fall 5.81 million bales from beginning stocks to 38.34 million. The question of what China will do with its massive stocks continues to hang over the market.
Futures open interest declined 1,455 lots Monday to 183,657, with MarchΆs down 1,197 lots to 117,570 and MayΆs down 539 lots to 31,853. Cert stocks were unchanged at 64,142 bales.
