U.S. growers contracted 5% of upland acres. Producers rushed picking in Southeast and harvest expanded elsewhere. Backlogs of modules grew in the Delta. Early quality reported typical at Lamesa. Harvest neared an end at Yuma. Ginning set to begin in the San Joaquin Valley.
Cotton futures settled modestly higher Monday, with spot December snapping a three-session losing string but giving up a chunk of its jump overnight to triple-digit gains.
December gained 38 points to close at 67.36 cents, finishing in the lower quarter of its 139-point range from up 151 points at 68.49 cents to up 12 points at 67.10 cents. It traded overnight up to around its 40-day moving average.
March also gained 38 points, finishing at 68 cents, while December 2017 rose 46 points to settle at 68.55 cents.
Volume increased to an estimated 20,343 lots from 19,942 lots the previous session when spreads accounted for 8,784 lots or 44% and EFP 59 lots. Options volume totaled 662 calls and 2,183 puts.
U.S. upland producers had forward contracted 5% of their acreage by Oct. 1, up from 3% a year ago but behind 9% two years ago and 16% in 2014, according to an informal survey by USDAΆs Agricultural Marketing Service.
The estimates, based on acres for harvest reported by USDAΆs National Agricultural Statistics Service, donΆt include consignments to marketing organizations but do include cotton contracted with them.
By regions, contracting and comparisons with a year ago included 12% in both the Southeast and Delta, up from 6%; 1% in the Southwest, even; and 6% in the West, also even.
While producers in the Southeast rushed picking ahead of Hurricane Matthew (see morning comments), defoliation, harvesting and ginning also quickened in the Delta and other areas of the U.S. Cotton Belt last week.
Backlogs of modules were building under ideal conditions in the North Delta and accumulating rapidly on turnrows and gin yards in the South Delta, USDAΆs AMS reported in a weekly cotton review Friday.
Extremely dry conditions prompted the National Weather Service to issue a high fire danger alert for central and northern Mississippi, which is suffering from moderate drought. Defoliation, picking and ginning were in full swing throughout the South Delta.
Open weather allowed harvesting to gain momentum in the Upper Coastal Bend, East Texas and the Winter Garden. Cool, wet conditions delayed defoliation in Kansas. Defoliation picked up in Oklahoma where 5% to 10% had been sprayed. Dryland cotton promises above-average yield potential, sources said. Bacterial blight was problematic in some irrigated fields.
Harvesting expanded under mostly clear conditions in the West Texas Plains. Spotty, light showers dotted the region. Additional gins initiated operations daily in the Lubbock and Lamesa classing territories. Early quality results at Lamesa were typical for the area.
Rainfall briefly delayed harvesting in Arizona. Harvesting neared an end around Yuma. Ginning continued uninterrupted. Defoliations were applied to fields in New Mexico and around El Paso. Limited harvesting was reported.
Defoliation gained momentum in the San Joaquin Valley under open weather. Harvesting expanded into Kern, Fresno and Tulare counties. Modules were transported to gins. Ginning was expected to begin Monday.
Futures open interest dropped 326 lots Friday to 246,816, with DecemberΆs down 1,114 lots to 13,571 and MarchΆs up 1,130 lots to 58,409. Cert stocks grew 180 bales to 31,263.
