December lost 199 points for the week. Mills added 680 lots to their unpriced on-call December position and producers priced 181 lots. Warm, dry Texas winter expected.
Cotton futures rallied from a 10-session low to finish modestly higher in choppy price action Friday, snapping a string of three losing days in a row.
December settled up 35 points to 68.08 cents, in the upper quarter of its 127-point range from down 61 points at 67.12 to up 66 points at 68.39 cents. It lost 199 points for the week but gained 250 points or 3.8% for the month and 391 points or 6.1% for the quarter.
March edged up 19 points to close at 68.54 cents, while December 2017 added 16 points to 68.89 cents.
Volume dipped to an estimated 20,798 lots from 22,312 lots the previous session when spreads accounted for 7,929 lots or 36% and EFP 176 lots. Options volume totaled 3,126 calls and 3,675 puts.
Mills added 680 lots to their unpriced on-call position in December last week and producers priced 181 lots, according to the latest data from the Commodity Futures Trading Commission.
The unpriced positions rose to 24,977 lots on the mill side and declined to 12,595 lots on the on the producer side. The net call difference thus widened 861 lots to 12,593 (1.259 million bales), which was 7.6% of DecemberΆs open interest, compared with 7.7% a week earlier.
Unfixed mill holdings outweighed those of producers by a ratio of 2.01:1, compared with 1.93:1 the previous week. Open interest in December grew 13,333 lots to 165,767 during the reporting week.
Elsewhere, mills added 1,160 lots in March, 848 lots in May and 371 lots in July, while pricing 259 lots in December 2017. Producers added 417 lots in March and 126 lots in May, and priced five lots in July and 188 lots in December 2017.
Across the board, mills added a net 2,768 lots to raise their unpriced call position to 76,841 and producers added a net 169 lots to hike theirs to 23,929. Open interest expanded 19,275 lots to 250,868.
On the weather scene, a La Nina winter pattern expected earlier probably wonΆt emerge and warmer, drier conditions likely will prevail on average into 2017, says the Texas state climatologist.
John Nielsen-Gammon of College Station says in a Texas AgriLife Extension Service report that the Climate Prediction Center now is calling for temperatures in the tropical Pacific of about half a degree below normal through the first few months of 2017.
Earlier forecasts were for the emergence of a La Nina pattern going into the fall, he said. But tropical Pacific temperatures didnΆt cool enough for that and now are classified as neutral, neither excessively warm, such as with El Nino, nor excessively cool, as with La Nina.
“Persistent El Nino conditions were responsible for above-average rainfall in Texas over the past year,” Nielsen-Gammon said. “La Nina events typically favor warm and dry winters in Texas. But the Pacific is close enough to La Nina temperatures that this winter will still lean toward the warm and dry side.”
Nielsen-Gammon said the influence of tropical Pacific waters on Texas weather patterns is stronger in the southern portion of the state. He said strong, dry cold fronts could make parts of Texas more vulnerable to wildfires, especially where grass growth fueled by rain dries out.
Futures open interest declined 1,291 lots Thursday to 250,174, with DecemberΆs down 2,412 lots to 160,784 and MarchΆs up 934 lots to 55,584. Cert stocks dropped 11 bales to 32,073. Awaiting review were 428 bales.
