Cotton Finishes With Modest Gains

Analysts forecast the U.S. cotton crop at 13.13 million bales, down from USDAΆs October estimate of 13.34 million. U.S. upland cotton classing reached 3.9 million running bales, down from 5.16 million a year ago.

U.S. cotton futures finished with modest gains on big volume within narrow price ranges Monday as traders looked ahead to USDAΆs monthly supply-demand forecasts.

December closed up 24 points to 61.90 cents, just above the midpoint of its 46-point range from down five points at 61.61 to up 41 points at 62.07 cents. It bounced after easing to a new low for the move. March settled up 38 points to 62.12 cents.

Volume rose to an estimated 47,100 lots from 46,316 lots the previous session when spreads accounted for 32,360 lots or a bulging 70% and EFP 716 lots. Options volume totaled 2,305 calls and 6,256 puts.

U.S. cotton production is estimated at an average of 13.13 million bales, down from USDAΆs October forecast of 13.34 million, according to a survey of cotton analysts by The Wall Street Journal.

The estimates ranged from 13.0 million bales to unchanged. The USDA is scheduled to release its updated crop forecast at 11 a.m. CST on Tuesday as part of its domestic and world supply-demand estimates.

Analysts estimated U.S. exports at an average of 9.97 million bales within a range from 9.5 million to 10.2 million bales, compared with USDAΆs 10.2 million.

The survey showed an average ending stocks estimate of 3.25 million bales within a range from 2.9 million to 4.1 million bales, compared with 3.1 million bales forecast by USDA.

The USDA last month forecast ending stocks 600,000 bales below the beginning level and the stocks-to-use ratio at 22%, compared with last seasonΆs 25%.

Globally, some analysts expect a cut in production and a slight reduction in ending stocks, with mill use viewed as something of an enigma in view of cottonΆs ongoing stiff price competition from synthetic fibers and concerns about world economic growth.

The USDA last month projected world production down 10% from the prior year, with consumption up 2% for the fourth consecutive annual increase but with the battle for fiber share in in many apparel products expected to limit mill use growth. Global stocks were estimated to fall 4%, the first decline in six years.

Meanwhile, U.S. upland cotton classing of 982,017 running bales during the week ended Thursday, up from 904,417 the previous week, brought the seasonΆs total to 3,900,288.

The total represented 31% of USDAΆs October estimate in running bales. A year ago, 5,158,593 RB of upland had been classed, which was 33% of final production.

Pima classing of 35,019 bales of Pima brought the extra-long staple total for the season to 94,720 RB, down from 136,336 a year ago. All-cotton classing totaled 3,995,008 RB of 2015-crop cotton, compared with 5,294,929 last year.

Cotton meeting U.S. tenderable requirements slipped to 57.9% for the week from 59.0% the prior week but held steady for the season at 58.1%, down from 73.6% a year ago.

Futures open interest dropped 315 lots Friday to 194,650, with DecemberΆs down 7,092 lots to 80,755 and MarchΆs up 5,278 lots to 82,220. This marked the first time that DecemberΆs OI has been below MarchΆs.

Certificated stocks grew 3,274 bales to 45,596. Eighty-eight bales awaited review. Of those cert stocks, 11,537 bales also are eligible for delivery on the new world cotton futures contract.