Regional crop estimates showed Southwest yield projections 17 pounds below the five-year average, with the Texas yield forecast down 35 pounds from the average. Production prospects slipped in the Southwest and West, held steady in the Delta and edged higher in the Southeast.
Cotton futures rallied from an early morning dip to settle modestly ahead Thursday as traders continued to digest USDAΆs supply-demand report.
Spot December settled up 34 points to 69.31 cents, just above the midpoint of its 165-point range from down 57 points at 68.40 to up 108 points at 70.05 cents. It touched the low in overnight trading and the high about 20 minutes prior to the close.
March gained 35 points to close at 69.74 cents, while December 2017 edged up 24 points to settle at 69.77 cents.
Volume slowed to an estimated 28,046 lots from 43,905 lots the previous session when spreads accounted for 14,383 lots or 33% and EFP 48 lots. Options volume totaled 5,543 calls and 6,186 puts.
Contrary to general expectations for a modest increase in the October forecast for upland production in the Southwest, the USDAΆs updated regional estimate fell 100,000 bales — all in Texas — to 7.125 million.
The expected Southwest yield fell nine pounds to 609 pounds per harvested acre, 17 pounds below the five-year average. The Texas crop, now estimated at 6.5 million bales, reflected a statewide average yield of 589 pounds an acre, 35 pounds below the five-year average.
The Southwest crop is estimated up 16% from the prior year and the largest in six seasons. The harvested area of 5.616 million acres is projected at the largest since 2010, with abandonment estimated at 7%, compared with the five-year average of 36%.
Prospective production in the Texas High Plains dipped 45,000 bales to 4.1 million, up 8% from last seasonΆs 3.798 million. The cut was in the southern district, now pegged at 2.95 million bales, with cotton in the northern area remaining at 1.15 million bales.
The crop estimate for the adjoining Rolling Plains edged up 25,000 bales to 880,000, down 18,100 bales from last season.
Estimates elsewhere in Texas held steady at 110,000 bales in the Blacklands and 285,000 bales in the Lower Rio Grande Valley, fell 20,000 bales to 250,000 in the Edwards Plateau, 15,000 to 60,000 in the South Central area, 20,000 to 480,000 in the Upper Coast, and 45,000 to 145,000 in other districts. The Upper Coast crop rose by 20,000 bales to 190,000.
A slight yield increase had been expected in the Mid-South, but USDA left its estimate unchanged at 1,090 pounds per acre, compared with the five-year average of 1,012 pounds. The Delta crop forecast of 3.34 million bales is up 64% from last seasonΆs 2.037 million bales.
These latest estimates are based on conditions around Oct. 1 and thus donΆt take into account substantial damage from Hurricane Matthew to cotton in the Southeast.
Production there edged up 30,000 bales to 4.33 million, up 14% from last seasonΆs 3.787 million. The average regional yield of 963 pounds per acre was expected to top the five-year average of 871 pounds.
Upland production prospects in the West dropped 38,000 bales to 677,000, up 35% from 502,000 bales in 2015, with per-acre yields of 1,484 pounds expected to come in 12 pounds below the five-year average.
Futures open interest fell 991 lots Thursday to 241,573, with DecemberΆs down 2,328 lots to 147,267 and MarchΆs up 1,465 lots to 61,317. Cert stocks dropped 364 bales to 31,169. There were 360 newly certified bales and 724 bales decertified.
