March closed at its highest since Oct. 28 and matched its intraday high of Nov. 6. Strong jobs data, falling cert stocks and healthy export sales pace bolstered prices. Analysts pegged crop at 13.2 million bales.
Cotton futures broke out of the marketΆs recent lethargy Friday, jumping to a triple-digit closing gain on improved volume.
Benchmark March gained 156 points to settle at 80.41 cents, its highest close since Oct. 28 and 11 ticks off the high of its 168-point range from down a point at 78.84 to up 167 points at 80.52 cents. The high matched its intraday high of Nov. 6.
December expired 103 points under March. For the week, March gained 106 points and was up 376 points from its seasonal low last month.
Stronger-than-expected U.S jobs data, a continued decline in certificated stocks and a healthy export sales pace contributed to the gains, analysts said.
December deliveries are expected to be largely shipped against export commitments, depleting certificated stocks at a time when the cash basis has remained strong. Higher bids were considered likely required to replenish the stocks with quality cotton.
Volume climbed to an estimated 23,400 lots from 9,202 lots the previous session when spreads accounted for 2,290 lots or 25% and EFP for two lots. Options volume totaled 1,167 calls and 4,162 puts.
Cotton analysts have estimated the U.S. crop at an average of 13.2 million bales, compared with USDAΆs November forecast of 13.11 million, according to a survey by The Wall Street Journal.
The estimates ranged from 12.9 million to 13.4 million bales, down from 17.32 million bales produced last season and the smallest output since a crop of 12.19 million bales in 2009-10. The USDA will update its estimate on Tuesday.
Analysts estimated exports at an average of 10.5 million bales, up from USDAΆs 10.4 million, and ending stocks unchanged at 3.0 million bales. Export estimates ranged from 10.4 million to 10.8 million bales and ending stocks forecasts from 2.6 million to 3.7 million bales.
Last season, exports were 13.03 million bales and the carryout was 3.9 million bales. The survey didnΆt produce an estimate of domestic mill use, which USDA pegged at 3.6 million bales last month, up 100,000 bales from the September forecast and also from the 2012-13 consumption.
Meanwhile, U.S. all-cotton outstanding loans increased 140,387 bales to 924,440 during the week ended Dec. 7, USDA reported. Entries were 203,255 bales and repayments were made on 62,868 bales.
Outstanding loans included 113,818 bales of Form A issued to individual growers and 810,622 bales of Form G issued to marketing cooperatives or loan servicing agents.
Futures open interest dipped 144 lots Thursday to 157,611, with MarchΆs down 84 lots to 111,044 and MayΆs up 16 lots to 24,629.
Certificated stocks fell 2,160 bales to 94,361. There were 31 newly certified bales, 2,191 bales decertified and none awaiting review.
World values as measured by the Cotlook A Index slipped 25 points Friday morning to 85.30 cents. The premium to ThursdayΆs March futures settlement narrowed five points to 6.45 cents. For the week, the index gained 40 points.
