Cotton Jumps Above Prior Five-Session Highs

Cumulative effects of Texas rains caused concern. About 23% of the U.S. upland crop estimate classed. AWP declined. Mills priced 808 lots in December. Launch set for world contract.

Cotton futures finished with a triple-digit gain in spot December Friday, vaulting from a tiny early morning range to close above highs of the previous five sessions.

December settled up an even 100 points to 63.32 cents, its highest close since Oct. 21 and near the high of the sessionΆs 108-point range from 62.36 to 63.44 cents. It gained 56 points for the week and 288 points or 4.8% for the month. March closed up 79 points to 63 cents.

Concerns about the cumulative effects of rains on open cotton in the West Texas Plains may have contributed to the advance. Most of the Texas cotton remaining on the stalk is in the High and Rolling Plains.

Volume increased to an estimated 25,600 lots from 22,457 lots the previous session when spreads accounted for 12,463 lots or 56%, EFS 1,000 lots and EFP 70 lots. Options volume totaled 2,654 calls and 2,079 puts.

Index fund rolling from December has begun, with the Goldman Sachs roll scheduled to begin next Friday. First notice day for December deliveries is Nov. 23.

U.S. upland cotton classing increased to 904,417 running bales during the week ended Thursday from 805,581 bales the previous week to boost the total for the season to 2,918,943 RB, compared with 3,900,444 RB a year ago, according to the latest USDA figures.

The total amounted to about 23% of USDAΆs upland crop estimate. Tenderable cotton improved to 59% from 57.5% the previous week and rose to 58.1% for the season from 57.7%. A year ago, 73.6% classed for the season met tenderable standards.

Pima classing of 1,602 bales boosted the extra-long staple total for the season to 32,169 bales, down from 59,701 bales graded through the corresponding period last year.

On the competitive-pricing front, the average of the five lowest-priced world growths for the Far East fell 123 points to 66.89 cents during the week ended Thursday, according to USDA calculations, while the lowest-quoted U.S. cotton landed there slipped 110 points to 73.30 cents.

The spread thus narrowed 13 points to 6.41 cents. The adjusted world price for the program week ahead is 47.14 cents, down from this weekΆs 48.37 cents, USDA announced, resulting in the marketing loan gain rising to 4.86 cents from 3.63 cents. The fine count adjustment for qualities better than 31-3-35 is 96 points.

Meanwhile, unfixed on-call positions based in December declined 808 lots to 12,705 on the mill side and 606 lots to 7,990 on the producer side last week, according to Commodity Futures Trading Commission data.

The net call difference declined 202 lots to 4,715, which was 4.01% of the declining December open interest. The unfixed mill position outweighed that of producers by a ratio of 1.59:1. Mills added 1,246 lots in March and producers added 165 lots.

As reported earlier by Dow Jones Newswires, trading in the Intercontinental ExchangeΆs new world cotton futures contract will begin Sunday night alongside its U.S. cotton No. 2 contract.

The world contract will trade under the symbol WCT. An ICE announcement said the world contract is not likely to replace the U.S. contract but will have a “smaller, complementary role.”

Futures open interest dropped 927 lots Thursday to 198,772, with DecemberΆs down 2,748 lots to 106,492 and MarchΆs up 1,576 lots to 68,222. Cert stocks declined 411 bales to 46,721. There were 1,188 newly certified bales, 1,599 decertified bales and 4,573 bales awaiting review.