Cotton Tumbles to New Contract Lows
U.S. classing for the season rose to 298,162 bales, behind 722,388 bales a year ago. Mills priced 553 December on-call lots last week and producers priced 453 lots.
Cotton futures tumbled to new contract lows on brisk volume Friday amid fresh worries about the global economy sparked by the Federal ReserveΆs decision not to raise interest rates.
Benchmark December closed down 185 points to 60.55 cents, near the low of its 208-point range from up eight ticks at 62.48 to down 200 points at 60.40 cents. It took out its previous contract low of 61.20 set on Aug. 12, triggering sell stops on the descent.
March settled down 170 points to 60.52 cents, posting a new contract low also at 60.40. For the week, December lost 258 points and March shed 239 points.
Rare comments on China by Fed chairwoman Janet Yellen were reported to have reinforced concerns that its slowing economy might be headed for a deeper slump, though many economists insist that fears of a crisis in the worldΆs second largest economy and largest cotton consumer are overblown.
Volume jumped to an estimated 39,900 lots from 12,504 lots the previous session when spreads accounted for 3,426 lots or 27% and EFP 80 lots. Options volume totaled 6,411 calls and 4,975 puts.
On the crop scene, U.S. upland cotton classing rose to 100,987 running bales during the week ended Thursday from 80,977 the prior week, boosting the seasonΆs total to 298,162 bales.
Classing a year ago had totaled 722,388 bales. Cotton tenderable on futures contracts amounted to 67.2% for the week and 70.1% for the season, compared with 76.5% and 77.8%, respectively, a year ago.
State classing totals showed 2,532 bales from Louisiana, 578 bales from Mississippi and 295,052 bales from Texas. Ginning had begun on a limited basis in Georgia but no classing had been reported.
Growers coming into September had forward contracted only 3% of their expected U.S. upland production, down from 8% a year ago, 16% in 2013 and 13% in 2012, according to informal surveys by USDAΆs Agricultural Marketing Service.
These estimates donΆt include cotton consigned to marketing organizations but do include cotton contracted with them.
Separately, U.S. upland cotton under loan increased 27,735 bales to 35,204 during the week ended Monday, USDA figures showed. All the loans were Form G issued to marketing cooperatives or loan servicing agents.
Meanwhile, mills priced 553 on-call lots in December last week and producers fixed prices on 453 lots, according to the latest data from the Commodity Futures Trading Commission.
This reduced their unfixed positions to 19,590 lots on the mill side and 12,187 lots on the producer side and trimmed the net call difference by 100 lots to 7,403, 6.1% of DecemberΆs declining open interest. The unfixed mill position outweighed that of producers by a ratio of 1.6:1.
Elsewhere, mills added 926 lots in March, 328 lots in May and 452 lots in July, while producers priced 165 lots in July and added 151 lots in December 2016. Mills added 228 lots in December 2016.
Futures open interest edged up 29 lots Thursday to 176,376, with DecemberΆs down 329 lots to 117,593 and MarchΆs up 245 lots to 45,000. Certificated stocks declined 2,188 bales to 51,610.
