Ongoing strong U.S. export sales and shipments reinforced prospects for tightening old-crop supplies into volume movement of the new crop. Mills added a total of 4,051 lots to their on-call position last week.
Cotton futures locked up the 300-point daily limit in spot July in the early going Friday and remained there the rest of the session.
July closed at 82.18 cents, the highest spot futures price since June 2014. It posted the largest two-day advance, 569 points, since June 2012, adding 3.79% for the day to ThursdayΆs 3.52%. For the week, July gained 441 points or 5.7%.
December rose 119 points to close at 73.72 cents, in the upper half of its 203-point range from 72.50 to 74.53 cents and up 40 points for the week. The inverted July-December intercrop straddle settled on a new high premium of 846 points.
Thin October also traded limit up and settled up 293 points to 77.08 cents. Contracts beyond December closed up 80 to 92 points.
Volume was estimated at a still-heavy 55,638 lots, though down from a massive 67,317 lots the previous session when spreads accounted for 32,011 lots or 48%. Options volume jumped to a whopping 35,674 lots (32,949 calls and 2,725 puts) from 13,198 lots (7,096 calls and 6,102 puts).
Ongoing strong U.S. weekly export sales and shipments have sparked talk that USDA again may have to raise its 2016-17 export forecast, which it just this week boosted 500,000 bales to a 12-year high to 14.5 million.
The USDAΆs corresponding reduction to 3.2 million bales in the ending stocks estimate reinforced prospects for tightening supplies into the volume movement of the new crop, the timing of which can vary. Prices thus far had seemingly failed to ration available supplies.
Meanwhile, mills added a total of 4,051 on-call lots to their unpriced cotton futures position last week and producers added 394 lots, figures reported by the Commodity Futures Trading Commission showed after the close Thursday.
This raised unfixed positions to 113,144 lots on the mill side and 77,456 lots on the producer side. The net call difference rose 3,675 lots to 77,456, 35.8% of the open interest. Mills had 3.2 contracts to buy for every one that producers had to sell.
The surge through buy stops in July on Thursday may have been fueled partly by panicked mill fixations. Mills coming into this week had added 831 lots to boost their unpriced July position to 46,215 lots and producers had priced 88 lots to trim theirs to 3,842 lots, resulting in a ratio of potential buying to potential selling of 12:1.
Futures open interest declined for the fifth consecutive session Thursday, dropping 1,529 lots to 252,511. JulyΆs dipped 146 lots 131,294, DecemberΆs fell 1,679 lots to 103,688 and MarchΆs increased 169 lots to 11,703.
Certified stocks grew 9,364 bales to 320,132. There were 9,386 newly certified bales and 22 bales decertified. Awaiting review were 2,017 bales, including 264 at Galveston and 1,753 at Memphis.
