Cotton Slips Ahead of Supply-Demand Report
Analysts estimated U.S. crop up slightly to 13.51 million bales. All-cotton weekly export sales of 209,900 running bales raised 2015-16 commitments to 3.41 million, 34% of the USDA estimate.
Cotton futures finished lower Thursday as traders tweaked positions ahead of monthly crop and supply-demand estimates.
December closed down 33 points to 61.72 cents, just below the prior-session low and in the lower third of its 101-point range from up 40 points at 62.45 to down 61 points at 61.44 cents. It rallied from the overnight low on larger-than-expected weekly export sales but stalled shy of where WednesdayΆs rally failed against retracement resistance.
March settled down 35 points to 61.60 cents, while December 2016 dropped 28 points to close at 62.27 cents.
Volume totaled an estimated 18,400 lots, little changed from 18,532 lots the previous session when spreads accounted for 7,030 lots or 38% and EFP 24 lots. Options volume dwindled to 562 calls and 348 puts.
Cotton analysts have estimated U.S. production at an average of 13.51 million bales, up 0.6% from USDAΆs September forecast of 13.43 million, according to a survey by The Wall Street Journal.
The USDA is scheduled to release its updated crop estimate along with U.S. and world supply-demand forecasts at 11 a.m. CDT on Friday.
Crop estimates in the survey ranged from 13.2 million to 14 million bales. Ending stocks estimates averaged 3.39 million bales, against USDAΆs 3.2 million, and ranged from 3 million to 4.4 million bales.
Analysts estimated exports at an average of 10.1 million bales, against USDAΆs 10.2 million, within a range from 9.9 million to 10.2 million bales. The survey didnΆt include domestic mill use, forecast at 3.7 million bales by USDA.
Meanwhile, net U.S. all-cotton export sales for shipment this season rose to 209,900 running bales during the week ended Oct. 1 from the prior weekΆs 121,900 RB, boosting 2015-16 commitments to 3.41 million RB.
Upland sales of 206,900 RB were the largest since the week ended March 12, not counting unshipped old-crop export sales rolled forward at the start of this marketing year.
All-cotton commitments narrowed the lag behind year-ago bookings by 141,000 RB to 2.205 million and were about 34% of the USDA export projection. A year ago, commitments were 51% of final shipments.
Sales for delivery next season jumped to 358,300 RB from 800 RB the previous week. This hiked combined sales for both marketing years to 568,200 RB. New-crop commitments of 569,200 RB climbed to 106,400 RB ahead of forward bookings a year ago.
All-cotton shipments of 130,800 RB, up from 76,700 the week before, lifted the total for the season to 1.031 million RB. Cumulative shipments were 167,000 RB ahead of exports a year ago.
Shipments have reached about 10% of the USDA estimate, compared with about 8% of final 2014-15 exports at the corresponding point last season.
To achieve the USDA estimate, shipments need to average roughly 201,400 RB a week, while weekly sales averaging approximately 147,400 RB would match the export projection.
Futures open interest dipped 162 lots Wednesday to 189,599, with DecemberΆs down 1,094 lots to 121,066 and MarchΆs up 688 lots to 49,289. Cert stocks dropped 760 bales on 264 newly certified bales and 1,024 decertified bales.
