Report showed marginally lower U.S. production, higher exports and a lower carryout, combined with sharply lower world beginning and ending stocks. World crop shortfall forecast to widen 580,000 bales to 9.34 million.
Cotton futures soared in heavy trading Wednesday on the heels of USDAΆs monthly supply-demand report showing marginally lower U.S. production, higher exports and lower ending stocks.
The U.S. estimates combined with sharply lower forecasts for world beginning and ending stocks sent spot December surging to 69.75 cents, highest since last WednesdayΆs 70-cent peak and u from an early morning, pre-report low of 66.76 cents, lowest since Sept. 14.
December led the gainers, settling up 183 points to 68.97 cents, a six-session high finish in the upper third of the dayΆs 303-point range from down 38 points to up 265 points.
March closed up 167 points to 69.39 cents, while December 2017 advanced 136 points to settle at 69.53 cents.
Volume jumped to an estimated 43,857 lots from 18,874 lots the previous session when spreads accounted for 7,231 lots or 38%, EFS 117 lots and EFP 44 lots. Options volume totaled 6,368 calls and 10,396 puts.
Prospective U.S. all-cotton production declined 108,000 bales to 16.034 million, mainly on a 108,000-bale reduction to 6.5 million in Texas. Trade estimates had ranged from 15.9 million to 16.6 million bales, tilted mostly for a modest increase.
Upland production, based on conditions around Oct. 1, slipped to 15.472 million bales from 15.58 million and Pima production at 562,000 bales was carried forward from last month. The estimated upland acres for harvest remained at 9.46 million acres, up 19% from last season.
All-cotton yields dipped five pounds from the September estimate to 797 pounds per acre, 25 pounds below the five-year average. Record upland yields were forecast for Alabama, Oklahoma and South Carolina.
The export estimate rose by 500,000 bales to 12 million, mainly on higher world import demand, while the domestic mill consumption forecast remained at 3.5 million bales for a total market offtake of 15.5 million bales, up from 12.6 million bales last season.
Ending stocks declined 600,000 bales to 4.3 million, resulting in a stocks-to-use ratio of 27.8%, down from last seasonΆs 30.2% but still above that of the preceding six seasons.
The forecast range for the marketing year average farm price is 59 to 69 cents, with the midpoint of 64 cents up a penny from last monthΆs projection and up six cents last season.
Globally, beginning stocks fell 1.95 million bales to 96.6 million as consumption estimates for China were revised upward by a combined 2 million bales for the last two seasons.
The sale of more than 12 million bales from ChinaΆs recently completed reserve auctions amid rising domestic prices suggests that ChinaΆs mill demand had been underestimated. Consumption also was raised for Bangladesh for 2014-15 and 2015-16 based on revised data.
World production increased 220,000 bales from the September forecast to 102.69 million, with an increase for Australia partially offset by decreases for Brazil and the United States.
Global consumption rose by 800,000 bales to 112.03 million as mill use estimates were raised for China and Bangladesh but reduced for Uzbekistan. The projected world production shortfall widened 580,000 bales on the month to 9.34 million.
An approximate million-bale increase in world trade to 34.9 million mainly reflected higher imports for India and Bangladesh and higher exports for Australia, the United States and the African Franc Zone, partially offset by lower exports for Brazil.
World ending stocks fell 2.46 million bales to 87.35 million. The world stocks-to-use ratio declined to 78%, lowest since 2011-12 and down from 80.7% foreseen last month and 86.8% last season.
Futures open interest dropped 1,227 lots Tuesday to 242,564, with DecemberΆs 1,651 lots to 149,595 and MarchΆs up 543 lots to 59,852. Cert stocks grew 90 bales to 31,533.
