News of reduced imports by China last month and a continued buildup in cert stocks may have contributed to the pressure. Heavy rains shutdown harvesting in the Memphis territory and cool, damp conditions persisted in the West Texas Plains.
Cotton futures settled with a moderate loss to snap a three-session string of slightly higher closes Wednesday as spreads continued to weaken.
Spot December finished down 55 points to 83.16 cents, its lowest close since Sept. 5 after trading from up 27 points at 83.98 cents to down 78 points at 82.93 cents. The low held a couple of ticks above the Sept. 9 low and brought into view the important support area of 82.11 to 81.72.
March settled off 41 points to 84.28 cents, widening its settlement premium to December to 112 points.
Volume rose to an estimated 16,000 lots from 12,232 lots the previous session when spreads totaled 4,020 lots or 33%, EFP 369 lots and EFS 65 lots. Options volume totaled 3,475 calls and 1,717 puts.
The market didnΆt participate in risk-on vibes emanating from Wall Street on growing indications that a deal to avert a U.S. default on its debt and to reopen the partially shut government appeared within reach.
Overnight news that ChinaΆs cotton imports fell 27% in September from the previous month and 23.4% from a year earlier to 201,300 metric tons (924,554 bales) may have weighed on sentiment along with a continued buildup in certificated stocks.
ChinaΆs imports fell 19.9% in the first nine calendar year months to 3.23 million tons (14.836 million bales).
However, talk has circulated that China has been looking for cotton guaranteed to arrive before the expiration of December quota deadlines. China is the worldΆs largest cotton importer and consumer.
The USDA last month left its estimate of ChinaΆs 2013-14 marketing year imports unchanged at 11 million bales, down 46% from 20.33 million bales imported in 2012-13.
Meanwhile, heavy rains fell overnight in the Memphis territory, shutting down the harvest, and cool, cloudy, damp conditions persisted Wednesday in the West Texas Plains after some spotty overnight showers.
Cotton on the Texas High Plains has done about all its going to do this season in fiber maturation and producers are getting antsy to get the crop off the stalk.
Futures open interest slipped 263 lots Tuesday to 203,818, with DecemberΆs down 640 lots to 122,054 and MarchΆs up 225 lots to 62,361.
Certificated stocks grew 3,185 bales to 38,477 on new certifications of 3,495 bales and decertification of 310 bales. Cotton awaiting review rose to 41,529 bales, including 7,868 bales at Galveston, 12,185 bales at Greenville and 21,476 bales at Memphis.
World values as measured by the Cotlook A Index edged up five points Wednesday morning to 89.75 cents. The premium to TuesdayΆs December futures settlement narrowed five points to 6.04 cents.
Many spinners have been reported buying mainly hand-to-mouth, expecting downward pressure on prices as new-crop cotton becomes available in larger volume.
