Improved rain chances forecast through the holiday weekend on the Texas High Plains. U.S. 2012-13 export commitments exceed year-ago sales by about 7% and shipments have reached 82% of the USDA forecast.
Cotton futures closed lower Thursday, pressured by a combination of improvedhances for rain into the holiday weekend in the West Texas Plains, slowed manufacturing activity in China and technical weakness.
Spot July closed down 164 points to 81.78 cents, in the lower reaches of its 236-point range from up 46 points at 83.88 to down 190 points at 81.52 cents. It finished at its lowest close since Jan. 28 after triggering sell stops below 82.84.
December settled down 75 points at 83.64 cents, its lowest close since May 1. It also finished near the low of its 154-point range from up 49 points at 84.88 to down 105 points at 83.34 cents.
Volume quickened to an estimated 35,600 lots from 20,112 lots the previous session when spreads totaled 7,551 lots or 38% and EFP 606 lots. Options volume totaled 12,220 calls and 9,184 puts.
Rain chances improved to 30% in the Lubbock area this afternoon and 60% tonight, continuing at 50% Friday, 30% Friday night and 20% Saturday and Sunday. Isolated thunderstorms then are expected to continue through Memorial Day. This is the areaΆs best chance for rain in a long while.
Some of the thunderstorms expected late this afternoon and night will be severe, forecasters say. The main area of concern is the southern Texas Panhandle, Central South Plains and Rolling Plains.
Thunderstorms will have the capability to produce damaging wind gusts of more than 60 miles per hour and hail up to the size of baseballs, according to the National Weather Service.
An isolated threat for tornadoes cannot be ruled out, forecasters say, particularly from the extreme southern Panhandle across to the central Rolling Plains.
Slow storm movement is expected to promote locally heavy rainfall. The primary severe threat later tonight will transition to damaging straight-line winds, mainly across the Rolling Plains, forecasters say.
Much of the cotton area on the High Plains appears likely to get at least some rainfall, but observers say the moisture generally could be lost quickly to evaporation unless followed by additional timely rain.
Meanwhile, net U.S. all-cotton export sales for shipment this season of 107,100 running bales during the week ended May 16 boosted 2012-13 12.885 million running bales. This is about 100.2% of the USDA shipment forecast and is 879,600 bales or about 7% ahead of total sales a year ago.
All-cotton shipments of 254,100 running bales raised exports for the season to 10.570 million bales, up 1.65 million bales or about 18% from a year ago and about 82% of the USDA forecast. A year ago, shipments were about 79% of final exports.
To achieve the USDA projection, all-cotton shipments need to average roughly 228,200 running bales a week.
Net sales for shipment next season of 36,400 running bales nudged 2013-14 commitments to 1.646 million, narrowing the lead over forward bookings a year ago to 242,600 bales. New-crop commitments were about 15% of USDAΆs May forecast.
Futures open interest dropped 532 lots Wednesday to 190,462, with JulyΆs down 1,901 lots to 121,543 and DecemberΆs up 1,145 lots to 64,270.
Certificated stocks grew 376 bales to 509,848. No cotton awaited review.
World values as measured by the Cotlook A Index dropped 40 points to 91.50 cents. The index premium to WednesdayΆs July futures settlement widened four points to 8.08 cents.
