May tumbled to settlement discount to July. U.S. upland growers had contracted 6% of their expected 2017 acres coming into May. Upland 2016-crop loans outstanding declined 344,130 running bales to 2.027 million.
Cotton futures finished in the red a second day Monday amid negative technical readings and as May tumbled on its final trading day to a settlement discount to July.
May expired at 76.78 cents, down 298 points and a 41-point discount to July on a volume of 30 lots. It had settled at a daily premium since April 21.
July finished down 58 points to 77.19 cents, its lowest close since April 13 and in the lower quarter of its tight 72-point range from unchanged at 77.77 to 77.05 cents. It posted the session high just after the opening overnight and the high in early morning trading.
December lost 79 points to close at 73.33 cents, just off the low of its 90-point range from 74.17 to 73.27 cents and below lows of the previous three weeks.
Large overnight losses in China may have contributed to the pressure amid concerns about sustained regulatory tightening in the worldΆs second largest economy and largest cotton consumer. Data showed ChinaΆs trade surplus widened in April, but both exports and imports grew less than expected.
Volume increased to an estimated 22,696 lots from 21,831 lots the prior session when spreads accounted for 8,084 lots or 37% and EFP 54 lots. Options volume rose to 5,340 lots (2,709 calls and 2,631 puts) from 3,786 lots (2,534 calls and 1,252 puts).
U.S. upland growers had booked about 6% of their expected acreage coming into May, according to informal surveys by the cotton division of USDAΆs Agricultural Marketing Service.
The estimate, based on the National Agricultural Statistics ServiceΆs March prospective plantings report, compares with 1% booked through the corresponding period last year.
Contracting has been most active in the Southeast where 11% of the crop was under contract and in the Delta states at 10%, compared with 2% and 7% last year, respectively. Those were the largest percentages since 2013 when growers had booked 27% in the Southeast and 14% in the Delta.
Producers in the Southwest had contracted about 4%, compared with less than 1% last year, and growers in the West had booked 2%, against none at the end of April in 2016.
These estimates donΆt include cotton consigned to marketing organizations but do include cotton contracted with them.
Meanwhile, U.S. 2016-crop upland loans outstanding declined 344,130 running bales to 2.027 million during the week ended last Monday, according to the latest USDA figures.
Repayments were made on 344,493 RB and entries were 360 RB. Upland loans outstanding included 190,537 RB of Form A loans issued to individual growers and 1.837 million RB of Form G issued to marketing cooperatives or loan servicing agents.
The largest blocks of Form G outstanding loans were 544,352 RB in Texas and 290,285 RB in Georgia, while the largest amount of Form A cotton under loan was 124,573 RB in Tennessee.
Futures open interest dropped 1,653 lots to 261,375 lots Friday, the first decline in nine sessions. MayΆs increased 17 lots to 40, JulyΆs fell 2,161 lots to 139,713 and DecemberΆs rose by 187 lots to 105,928.
Certified stocks declined 1,784 bales to 322,820. There were 4,108 bales decertified and 2,324 newly certified bales. Awaiting review were 2,904 bales, including 2,728 bales at Memphis and 176 bales at Galveston.
