Increase from crop year low expected in U.S. weekly export sales report. Monthly supply-demand estimates by ICAC showed only fractional changes for 2013-14.
Cotton futures finished mixed on thin volume Wednesday, settling lower in old-crop deliveries and a bit higher in traded new-crop contracts.
Most-active May closed down 61 points to 88.61 cents, in the lower quarter of its 123-point range from up 35 points at 89.57 to down 88 points to 88.34. The high precisely matched the Feb.25 high.
May touched the high overnight, hit the low first about 9:30 a.m. CST and again about 20 minutes later, and then chopped back and forth the remainder of the day.
July also lost 61 points, closing at 87.86 cents, and December edged up eight points to 78.89 cents. Dry conditions in the West Texas Plains have offered support for the new-crop contract.
Volume slid to an estimated 12,800 lots, lowest of the year, from 14,882 lots the previous session when spreads totaled 4,642 lots or 31%, EFP 211 lots and EFS 35 lots. Options volume totaled 831 calls and 3,455 puts.
An increase is expected in U.S. export sales data to be released by USDA at 7:30 a.m. CST Thursday for the week ended Feb. 27. Some trade guesses have ranged from 70,000 to 125,000 running bales. Cancellations again could be the kicker.
Net upland sales the previous reporting week were 27,100 running bales, a marketing year low, on gross sales of 86,800 bales and cancellations of 59,800 bales.
May futures during the reporting week ranged intraday from a seasonal high of 90.44 cents to the lowest since Feb. 5 at 86.12 cents and on a closing basis from 89.30 to 86.37 cents.
Meanwhile, the International Cotton Advisory CommitteeΆs monthly 2013-14 world supply-demand estimates showed only marginal changes. Converted to statistical 480-pound bales from metric tons, the global carryout projection eased down 40,000 to 91.54 million.
ThatΆs up 12.1% from the ICAC estimate of 2012-13 ending stocks. World production is expected to fall 4% from last season to 118.27 million bales and consumption to rise by 1% to 108.39 million bales.
Looking ahead to 2014-15, ICAC expects world production to exceed consumption for a fifth season and ending stocks to grow 4.6% to 95.72 million bales.
At its outlook forum last month, USDA projected 2014-15 world ending stocks at 100.5 million bales, up 4.1% from its estimate for 2013-14. This would be 88.9% of mill use, up from 88.1%. ChinaΆs stocks were projected to edge up to 57.7 million bales from 57.3 million.
World production is projected by ICAC to decline again next season, dropping by 1.6% to 116.39 bales. But it still would top consumption, though mill use is forecast to grow 3.5% to 112.21 million bales.
The mill use increase is based on continued economic growth in Asia where much of the consumption takes place.
Harvesting will be underway in the Southern Hemisphere this month and planting will begin in many countries in the Northern Hemisphere, ICAC pointed out.
Futures open interest expanded 2,358 lots Tuesday to 164,258, with MayΆs up 1,962 lots to 102,093, JulyΆs down 13 lots to 32,940 and DecemberΆs up 427 lots to 27,659. Cert stocks dipped three bales to 259,092. Awaiting review were 2,565 bales.
World values as measured by the Cotlook A Index gained 85 points Wednesday morning to 95.15 cents. The premium to TuesdayΆs May futures settlement narrowed four points to 5.93 cents.
