Cotton Settles Modestly Lower

U.S. commitments reached 40% of the USDA export forecast, compared with 56% of final 2014-15 shipments a year ago. U.S. retail sales ticked up just 0.1% in October. Cotton use estimate questioned.

U.S. cotton futures settled with modest losses in narrow-range price action after falling to new lows for the move amid open harvest weather across the belt Friday.

December closed down 16 points to 61.68 cents, around the middle of its 66-point range from up 18 points at 62.02 to down 48 points at 61.36 cents. It traversed the entire range in the fading minutes of the session, falling from the high to its lowest intraday print since Oct. 9 at 60.97 and then trimming the loss.

March settled down 17 points to 61.99 cents, trading from 61.56 — its lowest intraday price since Oct. 13 — to 62.23 cents. For the week, December edged up two points and March gained 25 points.

Volume slowed to an estimated 43,700 lots from 49,372 lots the prior session when spreads accounted for 35,380 lots or 72%, EFS 2,000 lots, block trades 1,000 lots and EFP 172 lots. Options volume totaled 7,617 calls and 4,361 puts.

Net U.S. all-cotton export sales for shipment this season of 135,800 running bales during the week ended Nov. 5, down from 161,000 the prior week, brought 2015-16 commitments to 3.960 million RB.

The lag in commitments behind cumulative sales a year ago widened slightly to 2.179 million bales or 35%. Weekly sales were a little above the top end of the range of some expectations.

Commitments — outstanding sales of 2.471 million RB plus shipments — were 40% of the USDA export forecast, compared with 56% of final 2014-15 exports a year ago.

All-cotton shipments of 76,000 RB, down from the marketing year high of 166,800 RB the week before, raised exports for the season to 1.489 million RB, narrowing the lead over year-ago exports to 229,000 RB.

Shipments represented about 15% of the USDA projection, compared with about 12% of final exports at the corresponding point last season.

To achieve the USDA forecast, shipments need to average roughly 221,200 RB a week, while sales averaging approximately 156,200 RB would match the export estimate.

Sales for shipment next season of 1,100 RB, down from 7,700 the previous week, nudged 2015-16 commitments to 593,200 RB, up 104,100 RB from forward bookings a year ago.

In the news, consumer spending barely edged up last month and was weaker than previously thought in September, suggesting Americans remain cautious about opening their wallets despite strong job gains and accelerating wages, Dow Jones Newswires reported.

Retail sales rose just 0.1% from the prior month to a seasonally adjusted $447.3 billion in October, the Commerce Department said, following two months of flat sales.

Economists surveyed by The Wall Street Journal had expected a 0.3% increase in October. Retail sales were unchanged in September, down from an initially reported 0.1% gain.

The sales data and disappointing forecasts from department store chains for the key holiday shopping season may have reinforced skepticism among some in the trade that world cotton mill use can reach the reduced estimate reported earlier this week by USDA.

World cotton consumption for 2015-16 was projected down 680,000 bales from the October forecast to 111.59 million, up a modest 1.1% from 2014-15 mill use.

Plunging oil prices have resulted in polyester being offered below 50 cents per pound in the Far East, one analyst said, and new fashion trends have stolen market share from cotton.

U.S. futures open interest fell 1,258 lots Thursday to 191,869, with DecemberΆs down 9,136 lots to 44,724 and MarchΆs up 7,223 lots to 110,906. Cert stocks grew 2,770 bales to 49,851. There were 3,166 newly certified bales, 396 decertified bales and 8,309 bales awaiting review.