Rainfall at Lubbock site totaled 3.4 inches in a 48-hour period. ChinaΆs sales from its huge reserves reported to have reached 2.542 million bales.
Cotton futures settled lower for the third session in a row Wednesday, trading within the previous-day price ranges.
Spot July settled down 77 points to 63.17 cents, in the lower half of its 114-point range from up 14 points at 64.08 to down 100 points at 62.94 cents. December closed down 55 points to 63 cents, also below the midpoint of its 92-point range from 63.59 to 62.67 cents.
Overbought stochastic readings contributed to the selling even as continuing rains further impeded planting progress in the Texas Plains.
With rain still falling, a West Texas Mesonet measurement showed a 48-hour accumulation of 3.43 inches at Lubbock to about 12:30 p.m. CDT Wednesday. Chances for more thunderstorms were rated at 60% Wednesday night and 50% Thursday, with dry conditions then forecast through Tuesday.
Volume increased to an electronically estimated 35,5400 lots from a final 31,844 lots the previous session when spreads accounted for 13,458 lots or 42%, EFS 500 lots and EFP 85 lots.
ChinaΆs sales from its huge strategic reserves are reported to have reached an accumulated 2.542 million bales as of Tuesday. The sales began May 3 and will continue through August, ending prior to the new-crop harvest.
Mill cotton use in China, the worldΆs largest consumer of the natural fiber, is expected to benefit from its domestic textile plants gaining access to supplies from the national reserves at competitive prices.
The USDA last month projected ChinaΆs cotton consumption in 2016-17 up a million bales or 3% to 33.5 million from mill use this season. The growth is likely to be supported by declining cotton yarn imports, which USDA expects to continue but at a slower pace than in 2015-16.
ChinaΆs raw cotton imports next season are expected to remain limited, reaching only 4.5 million bales, compared with 4.25 million bales estimated for 2015-16 and 8.28 million bales in 2014-15.
Despite policies expected to reduce its cotton stocks considerably over several seasons, China will continue to hold the majority of the world carryover in 2016-17. ChinaΆs stocks are forecast to decline 10% to 56.7 million bales but still account for 60% of the world carryout.
Yet ChinaΆs purchases of U.S. cotton this season have exceeded some expectations. As of May 19, China had bought 769,000 statistical bales of U.S. cotton for 2015-16, ranking fourth among export customers behind Vietnam, Turkey and Mexico.
“The Chinese hope to replenish their supply of high quality new crop from local production, but in case they cannot they are buying U.S. and Australian quality cotton,” O.A. Cleveland, Mississippi State professor emeritus and cotton marketing specialist, said in a recent report.
Futures open interest expanded 1,592 lots Tuesday to 202,777, with JulyΆs down 1,271 lots to 92,677 and DecemberΆs up 2,485 lots to 91,500. Cert stocks grew 6,311 bales to 103,675. Awaiting review were 2,296 bales.
