Brexit vote generated world economic uncertainty. Mills priced 6,650 lots in July last week. India booked cotton imports cotton from Pakistan. U.S. outstanding upland loans fell to 720,645 bales.
Cotton futures felt the fallout as shockwaves spread through markets worldwide Friday, finishing down 38 to 109 points.
Most-active December settled down 100 points to 64.42 cents, in the lower half of its 160-point range from up a point at 65.43 to down 159 points at 63.83 cents. It closed back below its nine-day and 18-day moving averages.
Maturing July posted the smallest loss, settling at 64.50 cents, in the upper half of its 124-point range from 64.94 to 63.70 cents. For the week, July slipped seven points and December fell 150 points.
Volume slowed to an estimated 20,963 lots from 22,600 lots the previous session when spreads totaled 7,028 lots or 31%, EFP 1,887 lots and EFS 40 lots. Options volume totaled 2,774 calls and 6,383 puts.
Uncertain global economic conditions pressured cotton as world equity markets plunged, the U.S. dollar index surged and commodities in general reeled in the wake of BritainΆs vote to leave the European Union.
An apparent tightening of available supplies of higher cotton qualities drew some attention, partly linked to expanded premiums of 2015-16 world values over forward quotes and to a reclaimed narrow premium of July futures over December.
Meanwhile, mills priced 6,650 on-call lots in July last week and producers fixed prices on 438 lots, according to the latest call data reported by the Commodity Futures Trading Commission.
This reduced the unpriced July positions to 5,414 lots on the mill side and 858 lots on the producer side. The net call difference thus declined 6,212 lots to 4,556 lots, which was 33.1% of JulyΆs declining open interest.
With four trading days then left until first notice day, mills had 6.3 lots to price in July to every one lot by producers.
In the big December contract, which accounted for 78.1% of the open interest, mills boosted their unpriced position by 3,474 lots to 31,482 and producers increased theirs by 223 lots to 16,430.
In something of an oddity, India, the worldΆs biggest cotton producer, has contracted to import 20,000 bales from Pakistan this month after Indian prices jumped because of limited supply, Reuters reported, quoting industry officials in Mumbai.
Supplies were reported dwindling in both countries. A sharp rally in Indian prices made imports viable from Pakistan but it has a limited quantity for exports, a dealer with a global trading firm told Reuters.
The All Pakistan Textile Mills Association has urged the Pakistan government to restrict cotton exports to India in an attempt to provide raw material for domestic textiles production. Indian industry officials have said Pakistan should not restrict exports because it imported cotton when it was in need.
On the U.S. cotton scene, upland 2015-crop loans outstanding fell 5,828 running bales to 720,645 RB during the week ended Monday, according to the latest USDA figures.
Upland cotton under loan included 97,881 RB of Form A issued to individual growers and 622,764 RB of Form G issued to marketing cooperatives or loan servicing agents.
Futures open interest dropped 664 lots Thursday to 185,458, with JulyΆs down 1,880 lots to 789 and DecemberΆs up 295 lots to 152,682. Cert stocks increased a single bale to 135,162 bales.
