Cotton Settles at New Low Close Since Nov. 30

Strong winter storm headed for Texas High Plains this weekend as growers rushed remaining cotton harvest. Cotton Outlook reduced its U.S. crop estimate to 12.861 million bales.

U.S. cotton futures settled lower for the third session in a row and the ninth in the last 10 Wednesday amid some yearend evening up and positioning ahead of a long holiday weekend.

Spot March closed down 39 points to 62.77 cents, just off the low of its 62-point range from up 21 points at 63.37 to down 41 points at 62.75 cents. It finished below last weekΆs low and at a new low close since Nov. 30.

May settled down 38 points to 63.56 cents, while December 2016 dropped 34 points to close at 64.13 cents.

The market will close at noon CST on Thursday, remain shuttered Friday for Christmas and reopen at 7 a.m. CST on Monday.

Volume increased to an estimated 14,002 lots from 9,934 lots the previous session when spreads accounted for 3,290 lots or 33% and EFP 113 lots. Options volume totaled 1,910 calls and 547 puts.

On the weather front, a strong winter storm with the potential to bring widespread snow, strong winds and sharply colder temperatures is forecast to impact the Texas High Plains from Saturday night through Monday morning.

Wintry precipitation, preceded by showers, is expected over much of the region. Blizzard conditions are possible on Sunday as strong winds combine with accumulating snow. Heavy snowfall is considered likely in the Lubbock area, though forecasters also point out the ground is warm and could limit accumulations for a time.

The High Plains cotton harvest was estimated around 90% to 95% complete near the end of last week. Producers rushed under open weather this week to get as much additional cotton off the stalk as possible ahead of the weekend storm, working into the nighttime in some areas.

Roads this weekend could become treacherous and impassable, forecasters say, which could restrict movement of modules to gin yards.

Temperatures are forecast to plunge from a high of 66 degrees Wednesday afternoon under mostly sunny, breezy conditions to highs of 22 degrees on Saturday and 25 degrees on Sunday.

Based on conditions around Dec. 1, USDA estimated the High Plains crop at 4.03 million bales, 69% of the Texas output and 31% of the U.S. all-cotton production. The estimate is up 24% from last yearΆs crop of 3.261 million bales and the areaΆs largest since 2010.

Some analysts expect USDA to reduce its U.S. production estimate in its next monthly crop report on Jan. 12. The December estimate was cut nearly 2% to 13.03 million, down 3.29 million bales from 2014.

Cotton Outlook has reduced its estimate of U.S. production by 67,000 metric tons (307,700 480-pound bales) to 2.8 million tons (12.861 million bales).

Futures open interest declined 766 lots Tuesday to 184,432, with MarchΆs down 1,562 lots to 126,860 and MayΆs up 63 lots to 30,132. Cert stocks were unchanged at 64,723.