U.S. estimates right in line with expectations. World estimates featured a million-bale increase in ChinaΆs imports. Stocks in the rest of the world outside China fell 830,000 bales.
Cotton futures closed lower in old-crop deliveries and mostly higher in new-crop contracts on heavy volume after USDAΆs monthly 2013-14 supply-demand estimates proved largely a “non-event” Wednesday.
Spot May fell to an 11-session low and closed down 135 points to 90.31 cents, near the low of its 201-point range from up 53 points at 92.32 cents to down 148 points at 90.31 cents. It closed at its lowest finish since March 5.
July settled off 98 points to 91.43 cents, in the lower quarter of its 171-point range, while December gained 24 points to 80.41 cents, six ticks off the high of its 44-point range and nine points off its intraday high for the move on March 26.
The updated U.S. estimates were right in line with expectations, and any surprises in the world forecasts were seen as small with only a marginal adjustment in the carryout.
Volume jumped to an estimated 46,500 lots from 29,934 lots the previous session when spreads totaled 18,585 lots or 62%, EFP 160 lots and EFS 71 lots. Options volume totaled 6,989 calls and 3,526 puts.
Estimated U.S. production fell 320,000 bales to 12.87 million, based on March end-of-season ginning figures, and ending stocks fell 300,000 bales to 2.5 million.
The carryout is the smallest since 1951, USDA said, and the stocks-to-use ratio of 17.5% is the smallest since 2010-11 when it was 14.2% and the carryover was 2.6 million bales. Domestic mill use and exports were unchanged at 3.6 million and 10.7 million bales, respectively.
The marketing-year average price at the farm level is forecast at 76 to 79 cents, up a cent on both ends of the range, reflecting recent higher market prices. The midpoint of 77.50 cents is up from an average of 72.50 cents received by producers in 2012-13.
Globally, production eased a marginal 60,000 bales to 116.62 million, with the decrease in the United States mostly offset by increases for Brazil, Burkina Faso and others. Consumption rose by 240,000 bales to 109.45 million, up 2.8% from last season.
The estimates featured a million-bale increase from a month ago to 12 million in imports by China, based on stronger-than-expected imports thus far and the likely release of new import quotas.
World trade rose by 1.2 million bales to 39.6 million. Increases in imports by China, Pakistan and Vietnam were partially offset by reductions for India and Indonesia. Exports rose for Australia, India and Burkina Faso but declined for Brazil and Pakistan.
World ending stocks grew a slight 170,000 bales to a new record high of 96.92 million, 88.6% of mill use. A 490,000-bale increase to 89.65 million in beginning stocks contributed to the carryout hike.
ChinaΆs ending stocks expanded a million bales to 58.81 million, 60.7% of the world carryout. Stocks in the rest of the world outside China declined 830,000 bales on the month to 38.11 million, down 1.18 million bales from 2012-13.
Futures open interest expanded 1,104 lots Tuesday to 184,168, with MayΆs down 4,875 lots to 70,554, JulyΆs up 4,794 to 64,353 and DecemberΆs up 925 lots to 44,496. Certificated stocks grew 1,991 bales to 267,885.
World values as measured by the Cotlook A Index gained 100 points Wednesday morning to 94.85 cents. The premium to TuesdayΆs May futures settlement narrowed 17 points to a new low for the move at 3.06 cents.
The Forward A Index for 2014-15 edged up 15 points to 88.60 cents, with the current-crop premium widening 85 points to 6.25 cents.
