Mills priced 1,563 on-call lots in May last week. U.S. Far East premium narrowed to 1.80 cents. Upland cotton under loan declined 119,127 RB to 4.425 million.
Cotton futures chopped back and forth within the price span established by early morning and finished modestly ahead Friday, extending the previous day’s friendly range reversal.
- Spot May settled up 32 points to 57.15 cents, in the upper third of its 96-point range from down 34 points at 56.49 to up 62 points at 57.45 cents. It touched the low in the opening minutes overnight, hit the high around 7:20 a.m. CST and again about three hours later, backed down to 56.81 and bounced into the close.
- May backed off after punching through a 25% retracement (57.35) of the 11.27-cent decline from the December high to the February contract low for a second session this week, having closed just above that on Monday.
- July closed up 26 points to 57.03 cents and December edged up 12 points to 56.82 cents. For the week, May eked up four points, July gained 32 points and December rose 37 points.
- Volume slowed to an estimated 24,300 lots from 35,170 lots the previous session when spreads accounted for 15,850 lots or 45% and EFP 388 lots. Options volume totaled 5,540 calls and 2,524 puts.
Mills priced 1,563 on-call lots (156,300 bales) in May and producers fixed 94 lots last week, reducing their respective unpriced positions to 12,173 lots and 5,050 lots, according to the latest data from the Commodity Futures Trading Commission.
The net call difference thus declined 1,469 lots to 7,123, representing 5.81% of MayΆs rising open interest, down from 7.09% a week earlier. The unfixed mill position outweighed that of producers by a ratio of 2.41:1, compared with 2.67:1 the week before.
Elsewhere, mills added 543 lots in July, 77 lots in December and 419 lots in March 2017. Producers added 245 lots in July, priced 176 lots in October and added 919 lots in December. The October action left neither producers nor mills with any on-call position in that thinly traded new-crop month.
On the competitive-pricing front, the average of the five lowest-priced world growths for the Far East gained 51 points to 63.55 cents for the week ended Thursday, according to USDA, while the lowest-priced U.S. cotton rose 25 points to 65.35 cents.
The U.S. premium thus narrowed 26 points to 1.80 cents. The adjusted world price, reflecting transportation and quality differentials, is figured at 43.80 cents for the program week ahead, up from 43.29 cents. This results in a corresponding marketing loan gain of 8.20 cents.
There again will be no fine count adjustment for qualities better than 31-3-35. This adjustment is designed to reflect differences between premiums in the U.S. and international markets.
Special import quotas are triggered when the weekly average U.S. Far East price exceeds the prevailing world market price for any four consecutive weeks. Thirteen quotas were open for 879,278 bales as of the week ended Thursday. Imports for the 2015-crop year are estimated at only 10,000 bales.
Separately, U.S. upland loans outstanding declined 119,127 running bales to 4.425 million during the week ended Monday, according to the latest USDA figures. Entries were 20,625 RB and repayments were made on 139,752 RB.
Upland cotton under loan included 289,519 RB of Form A issued to individual growers and 4,135,805 RB of Form G issued to marketing cooperatives or loan servicing agents.
Futures open interest grew 2,847 lots Thursday to 214,373, with MayΆs up 432 lots to 122,196 and JulyΆs up 1,531 lots to 46,315. Cert stocks again declined, dropping 2,244 bales to 64,770.
