U.S. export estimate increased 200,000 bales to 10.7 million and ending stocks lowered by a corresponding amount to 2.8 million bales. World ending stocks rose to new record on slightly lower mill use.
Cotton futures settled with modest gains Monday after USDAΆs updated 2013-14 supply-demand estimates showed a tightening U.S. carryout, as expected, and another new all-time high in world ending stocks.
Spot May edged up 29 points to close at 91.56 cents, just below the midpoint of its 192-point range from down 59 points at 90.68 to up 133 points at 92.60 cents. July edged up nine points to 90.46 cents and December gained 46 points to 79.78 cents.
The market on last weekΆs big rally had largely priced in the USDA revisions in the U.S. balance sheet.
Volume slowed to an estimated 18,900 lots from 29,862 lots the previous session when spreads totaled 9,853 lots or 33% and EFP 232 lots. Options volume totaled 5,570 calls and 4,093 puts.
U.S. exports rose by 200,000 bales from a month ago to 10.7 million on strong recent activity and ending stocks fell by a corresponding amount to 2.8 million bales. The stocks-to-use ratio declined to 19.6% from 21.3% foreseen a month ago, 23.6% in 2012-13 and 22.3% in 2011-12.
Estimated production remained at 13.19 million bales, as expected ahead of the end-of-season ginning figures on March 25, and domestic mill use held steady at 3.6 million bales.
Based on the latest available ginning and classing figures, many analysts expect the final output to come in shy of the estimate. The USDA is expected to revise its crop estimate in the April supply-demand report on the basis of end-of-season ginning data on March 25 and to tweak it further in the final tally in May.
The USDA range of 75 to 78 cents for the marketing year average price received by producers rose by a cent on the lower end, with the midpoint rising 50 points to 76.50 cents. The average last season was 72.50 cents.
Globally, ending stocks are expected to rise by 280,000 bales from a month ago to 96.75 million, which is 88.6% of projected consumption. Production was virtually unchanged at 116.68 million bales, up 10,000 bales, and consumption dipped 270,000 bales to 109.21 million bales.
Decreases in consumption of 500,000 bales each to 35.5 million for China and to 11 million for Pakistan were partly offset by increases mainly of 250,000 bales to 23.25 million for India, 200,000 bales to 4 million for Bangladesh and 100,000 bales to 2.8 million for Vietnam.
ChinaΆs consumption was lowered based on increasing concentrations in the national reserve and continued growth in cotton yarn imports, USDA said, while sluggish imports indicated lower mill use in Pakistan.
The lower consumption resulted in ChinaΆs ending stocks rising 500,000 bales to 57.81 million, 59.8% of the world carryout. Stocks in the rest of the world outside China declined 220,000 bales to 38.94 million, compared with 38.8 million bales in 2012-13 and 42.24 million bales in 2011-12.
Futures open interest fell 1,488 lots Friday to 173,303, with MayΆs down 2,054 lots to 106,054, JulyΆs up 13 lots to 34,929 and DecemberΆs up 351 lots to 29,834. Certificated stocks grew 1,442 bales to 259,581. Awaiting review were 802 bales.
World values as measured by the Cotlook A Index dropped 25 points Monday morning to 97.30 cents. The premium over FridayΆs May futures settlement widened nine points to 6.03 cents.
