On-call data showing large unpriced old-crop mill position viewed as offering scale-down support. U.S. outstanding upland loans declined to 1.573 million bales. Showers expected on Texas Plains.
Cotton futures rallied from morning losses to close higher in old-crop contracts Friday, with data showing large unpriced on-call sales viewed as offering scale-down support.
Spot May closed up 51 points to 92.19 cents, in the upper quarter of its 204-point range from down 112 points at 90.56 to up 92 points at 92.60 cents. It rallied after sliding below ThursdayΆs low and testing support at 90.44.
July gained 98 points to 90.84 cents, near the high of its 163-point range from 89.37 to 91 cents. December settled off 10 ticks to 79.84 cents after touching a high at 80 cents.
For the week, the market gained 92 points in May, 47 points in July and 52 points in December.
Volume slowed to an estimated 15,500 lots from 17,510 lots the previous session when spreads totaled 6,338 lots or 36% and EFP 211 lots. Options volume totaled 4,142 calls and 2,780 puts.
Mills priced 513 lots in the May contract last week and producers shaved their unfixed position there by 465 lots, according to the latest on-call data from the Commodity Futures Trading Commission.
This left unfixed holdings of 18,404 lots on the mill side and 1,971 lots on the producer side, with the net call difference easing off only 48 lots to 16,433, which was 15.47% of the open interest.
The ratio of the unfixed mill May position to that of producers increased to 9.34:1 from 7.77:1 a week earlier.
Unfixed mill positions in July rose by 567 lots to 28,300 on the mill side and declined 196 lots to 2,159 on the producer side. The combined May-July open call positions edged up 54 lots to 46,704 for mills and declined 661 lots to 4,130 for producers.
This resulted in the net call difference in the two remaining old-crop contracts rising by 715 lots to 42,574 lots or 4.257 million bales, 30.16% of the growing open interest. In July, unfixed sales were 81% of the open interest.
Mills had 11.31 contracts on which to fix prices in May-July to every one for producers. In December, however, producers had twice as many lots to price (15,900) as mills (7,247). That imbalance wonΆt last long, analysts say.
Meanwhile, U.S. outstanding upland loans declined 107,775 running bales to 1,573,352 during the week ended Tuesday, USDA reported. Entries were 5,281 bales and repayments were made on 113,056 bales.
Upland loans outstanding included 124,101 bales of Form A issued to individual growers and 1,449,251 bales of Form G issued to marketing cooperatives or loan servicing agents.
An undetermined portion of the cotton under loan has been committed and is awaiting the approach of shipping dates to be withdrawn.
On the weather scene, a slight chance for spotty, light showers is forecast for tonight on the dry Texas High Plains. Chances are forecast to rise to 40% Saturday night, though amounts are expected to remain generally light. Blowing dust is in prospect Sunday.
Precipitation since Jan. 1 has totaled only 0.17 of an inch at Lubbock, 1.65 inches below normal and down from 2.23 inches a year ago. January-March precipitation was 1.29 inches in 2012 and 0.84 of an inch in the driest year on record in 2011 when the annual total was 5.86 inches.
Futures open interest gained 594 lots Thursday to 178,132, with MayΆs down 194 lots to 107,330, JulyΆs down 589 lots to 34,498 and DecemberΆs up 1,359 lots to 33,755. Cert stocks grew 699 bales to 261,594 on 715 newly certified bales and 16 bales decertified.
World values as measured by the Cotlook A Index dropped 40 points Friday morning to 97.40 cents. The premium to ThursdayΆs May futures settlement widened 12 points to 5.72 cents.
