July finished limit down. Annual cotton costs-to-market survey being conducted by FSA. Results will be used in calculating the AWP. Cert stocks have grown 63,931 bales in three business days.
Cotton futures extended the marketΆs highly volatile moves Tuesday, tumbling the 400-point daily limit in spot July and settling there.
July closed at 81.32 cents, down 4.7% and below the prior-session low. It posted the high of its 386-point range at 85.18 cents, down 14 points, right after the overnight opening and couldnΆt get above 84.90 — touched around midnight CDT — after that. July has made three limit moves in a row — two up and one down.
December settled down 56 points at 74.50 cents, in the lower reaches of its 79-point range from up three points at 75.09 cents to down 76 points at 74.30 cents.
Thin October, which posted a new contract high at 79.92 cents on Monday, closed down 185 points to 76.92 cents. The other deliveries finished down 33 to 69 points.
Volume slowed to an estimated 47,479 lots from the all-time high of 109,542 lots the previous session when spreads totaled 41,371 lots or 38%, block trades 2,186 lots, EFS 2,004 lots and EFP 18 lots.
Options volume declined to 20,145 lots (13,358 calls and 6,787 puts) from a heavy 37,053 lots (23,194 calls and 13,859 puts).
On the industry scene, a survey of average costs to market cotton is being conducted among merchandising firms by USDAΆs Farm Service Agency.
Survey forms have been distributed to gather information on the various costs by specific categories of landing cotton to Far East destinations from U.S. warehouses.
The results are used in calculating the upland cotton adjusted world price used in the marketing assistance loan program and in determining potential payments under the Pima or extra-long staple competitiveness program. The deadline for survey responses is June 2.
Timing of the survey is in line with recommendations of the National Cotton Council, American Cotton Shippers Association and AMCOT — the organization of marketing cooperatives — that were conveyed to FSA earlier this year.
A new “transportation adjustment” based on the survey is expected to be incorporated into the AWP in mid-July. The exact timing will be announced two weeks prior to the activation.
Timing of a previous transportation adjustment that hadnΆt been announced prior to incorporation into the weekly AWP caught the market off guard when the change appeared unexpectedly and created a strong reaction.
Futures open interest expanded 6,933 lots Monday to 262,033, with JulyΆs down 1,547 lots to 129,909, DecemberΆs up 7,717 lots to 113,115 and MarchΆs up 570 lots to 12,545.
Certified stocks continued to grow, increasing 21,005 bales to 374,699. There were 22,413 newly certified bales and 1,408 bales decertified. Awaiting review were 1,407 bales, including 791 at Galveston and 616 at Memphis.
Stocks in deliverable position have grown 63,931 bales in three business days, lured by the July premium.
