Cotton Edges to Modest Closing Gains
Cotton Council voices opposition to further limits on U.S. cotton policy. U.S. upland cotton ginned by mid-October totaled 1.434 million running bales, down 31.6% from a year ago. Lots of rain expected in southern and eastern Texas.
Cotton futures settled on modest gains Friday, possibly finding some bargain hunting on the heels of the previous sessionΆs steep losses.
Spot December closed up 24 points to 62.76 cents, in the middle of its 65-point range from up 55 points at 63.07 to down 10 points at 62.42 cents. It lost 113 points for the week. March settled down 23 points to 62.60 cents.
Volume slowed to an estimated 17,000 lots from 33,250 lots the previous session when spreads accounted for 11,045 lots or 33% and EFP 34 lots. Options volume totaled 4,487 calls and 2,141 puts.
The National Cotton Council opposes any more constraints on U.S. cotton policy, NCC President Gary Adams asserted this week at a House Agriculture Committee hearing on foreign subsidies.
There have been repeated comments from numerous countries for “something more” to be done on cotton policy at the World Trade OrganizationΆs ministerial meeting in December in Nairobi, Kenya, he said in a report.
But the NCC believes that the actions already taken on U.S. cotton policy “should be more than sufficient to allow U.S. negotiators to maintain a firm commitment not to accept any further calls for concessions on cotton,” he added.
Adams cited a recent International Cotton Advisory Committee report that estimated average direct per-pound assistance to cotton production across all countries at $0.26 and average U.S. support at only $0.07.
He also reiterated U.S. Trade Representative Michael FromanΆs comments before the Senate Finance Committee earlier this year that a defensive posture on U.S. cotton support is outdated and justifies a shift to other countriesΆ status regarding their WTO obligations.
The NCC will continue to urge U.S. negotiators to push other countries to be as current as is the United States with their domestic support notifications, Adams said, while emphasizing that U.S. programs are not having a detrimental impact on world markets or producers in other countries.
“Under current farm law, U.S. cotton farmers are even more attuned to market conditions,” Adams said. “For the U.S. cotton industry to sustain production and infrastructure, it is imperative that production and trade policies in other countries not put U.S. farmers at a disadvantage.
“I encourage the House Agriculture Committee and our negotiators to hold firmly to the position that agricultural markets have changed over the past decade and that U.S. cotton policy has evolved in ways that far exceed the previous demands within the WTO.
“A cotton specific ΅solutionΆ focused on developed countries does not address the realities of todayΆs global fiber markets,” Adams said.
On the U.S. crop scene, upland cotton ginned by Oct. 15 totaled 1,433,800 running bales, USDA reported Friday, down 31.6% from 2,096,400 bales processed a year ago.
Gins had processed 11.5% of the upland crop estimate in running bales, compared with 13.8% of final production at the corresponding point last year. Pima or extra-long staple ginning totaled 13,800 running bales, up from 11,400 bales a year ago.
Meanwhile, Hurricane Patricia, a Category 5 storm expected to make landfall Friday in southwestern Mexico, was expected to dump a lot of rain in southern and eastern Texas.
Ginning neared completion this week in the Rio Grande Valley and was beyond peak production in the Winter Garden and Upper Coastal areas, reports indicated. Harvesting was 75% to 90% completed in the Blackland Prairies.
Futures open interest fell 463 lots Thursday to 195,802, with DecemberΆs down 2,774 lots to 112,800 and MarchΆs up 2,053 lots to 62,248. Cert stocks grew 1,431 bales to 43,749. Awaiting review were 3,656 bales.
