Cotton Finishes Mixed, With Only December Ahead
The monthly U.S. balance sheet showed marginally lower production and unchanged ending stocks of 3.1 million bales, while the projected world carryout fell 880,000 bales to 106.09 million.
U.S. cotton futures settled mixed Tuesday, with only December managing a small gain after posting a five-session high in another round of heavy, spread-laden activity.
December closed up three ticks to 61.93 cents, in the lower quarter of its 130-point range from down 29 points at 61.61, matching MondayΆs low, to up 101 points at 62.91 cents, highest since last TuesdayΆs outside-range reversal down. It shot to the high on the heels of USDAΆs supply-demand report but quickly retreated to near the morning low.
March settled down 13 points to 61.99 cents, trading within a 118-point band from 61.82 to 63 cents.
The monthly U.S. balance sheet showed marginally lower production, with ending stocks unchanged at 3.1 million bales, while the world carryout forecast declined 880,000 bales or 0.8% to 106.09 million.
Volume increased to an estimated 56,200 lots from 47,147 lots the previous session when spreads accounted for 34,389 lots or 73% and EFP 2,029 lots. Options volume totaled 5,514 calls and 1,686 puts.
U.S. all-cotton production is projected at 13.281 million bales, down less than 1% from last month and down 19% from last year, USDA said.
Production prospects declined 57,000 bales from October as decreases in the Southeast and Delta were mostly offset by increases in the Southwest, including a belated 150,000-bale hike to 5.8 million in the Texas crop.
Acres for harvest dipped 20,000 from a month ago to 8.15 million, reflecting an abandonment of 4.8%, with yields projected at an average of 782 pounds, down from 784 pounds foreseen last month, 838 pounds last year and the five-year average of 829 pounds.
Upland production is forecast at 12.83 million bales, compared with 12.887 million projected last month and 15.753 million harvested last year, with the Pima or extra-long staple crop estimate carried forward from last month at 451,000 bales, down from 566,400 bales in 2014.
By regions, upland production is estimated at 4.095 million bales in the Southeast, down 170,000 from the October forecast; 2.070 million bales in the Delta states, down 90,000; 6.157 million bales in the Southwest, up 195,000; and 508,000 bales in the West, up 8,000 bales.
Exports and domestic mill use were unchanged on the month at 10.2 million and 3.7 million bales, respectively.
The USDAΆs projected range for the 2015-16 marketing year average price received by producers was narrowed by a cent on both ends to 55 to 63 cents per pound, with midpoint unchanged from last month at 59 cents. The 2014-15 average was 61.30 cents.
Globally, USDA reduced production by 1.75 million bales to 105.63 million and cut consumption by 680,000 bales to 111.59 million. Beginning stocks were raised 150,000 bales to 111.94 million and imports by a similar amount to 34.35 million.
Production estimates fell for India, Pakistan, China, Greece, Mali and Mexico, based on current indications of Northern Hemisphere harvest results. With consumption reduced mainly for China and Pakistan, total mill use now is projected to grow a modest 1.1% this season.
World ending stocks are forecast nearly 6 million bales below the beginning level, with ChinaΆs carryout of 65.47 million bales expected to account for 61.7% of the global total.
ChinaΆs stocks are forecast to drop 2.45 million bales from a year earlier. The carryout in the rest of the world outside China is projected to decline 3.4 million bales from beginning stocks to 40.62 million, compared with ending stocks of 41.7 million bales foreseen last month.
Futures open interest fell 2,970 lots Monday to 191,680, with DecemberΆs down 10,957 lots to 69,798 and MarchΆs up 6,273 lots to 88,493. Cert stocks dropped 199 bales to 45,477. There were 180 newly certified bales, 299 bales decertified and 5,460 bales awaiting review.
