Crop prospects in the Texas High and Rolling Plains accounted for the huge bulk of the statewide 300,000-bale increase to 6.6 million.
Cotton futures closed slightly higher Tuesday in the face of steep losses in U.S. stock markets, weak oil prices and gains to a five-session high in the U.S. dollar index amid uncertainty on the timing of a Federal Reserve interest rate hike.
Benchmark December settled up 21 points to 66.90 cents, in the lower half of its 138-point range from up 113 points at 67.82 cents to down 25 points at 66.44 cents. It hit the high overnight, fell to a seven-session low in morning dealings, bounced to 67.43 cents and chopped back and forth into the close.
October closed up 23 points to 67.20 cents, March edged up 11 points to 67.11 cents and December 2017 eked up five points to 67.28 cents.
Volume slipped to an estimated 23,938 lots from 28,363 lots the previous session when spreads accounted for 9,187 lots or 32%, EFS 50 lots and EFP 27 lots. Options volume totaled 3,467 calls and 5,141 puts.
Traders continued to digest USDAΆs monthly supply-demand estimates. The U.S. crop forecast appeared to garner the most attention, showing an increase of 263,000 bales from a month ago to 16.142 million bales.
The projected production was up 122,000 bales or 0.8% from the average estimate of analysts surveyed by The Wall Street Journal.
Prospective production in Texas rose by 300,000 bales to 6.6 million, with the High and Rolling Plains accounting for a combined 215,000 bales or 72% of the increase.
The High Plains crop forecast rose by 75,000 bales to 4.145 million, which would be up from 3.798 million bales harvested last year and the largest output since 2010.
The estimate reflected a reduction of 90,000 bales to 1.15 million in the more heavily irrigated northern district and an increase of 165,000 bales to 2.995 million in the southern area.
Estimated plantings area-wide increased by 115,000 acres to 3.705 million and acres for harvest rose by 75,000 to 3.4 million, reflecting an abandonment of 8.2%. Projected yields eased to 585 pounds from 587 pounds, down from 632 pounds last year.
Production in the two adjoining Rolling Plains districts increased 140,000 bales to 855,000. This boosted the combined output with the High Plains to 5 million bales, 76% of the Texas crop.
Crop prospects increased by 45,000 bales to 270,000 in the Edwards Plateau, 40,000 bales to 500,000 in the Coastal Bend, 30,000 bales to 285,000 in the Lower Rio Grande Valley and 15,000 bales to 190,000 in other districts.
Other areas showed declines, including 10,000 bales to 110,000 in the Blacklands, 15,000 bales to 75,000 in the South Central district and 20,000 bales to 170,000 in the Upper Coast.
Some traders were disappointed that that USDA didnΆt increase its U.S. export forecast following impressive sales volumes in recent weeks. The projected 11.5 million bales would be up 26% from the fractionally revised 9.15 million bales shipped last season.
ThereΆs been speculation that the robust early season sales pace may be related partly to tight availability of higher qualities prior to volume movement of new-crop supplies.
Futures open interest dropped 817 lots Monday to 230,224, with DecemberΆs down 1,642 lots to 153,131 and MarchΆs down 117 lots to 49,442. Cert stocks grew 371 bales to 35,309. There were 427 newly certified bales and 56 bales decertified.
