Traders awaited USDAΆs weekly crop progress report. Crop damage on a sizable Texas Plains acreage will take time to assess. Benefits from rains were expected to outweigh losses, though some areas “hit really hard.”
Cotton futures rallied from multi-session lows to finish on modest gains Wednesday, regaining some of the ground lost on Monday.
December settled up 21 points to 67.66 cents, near the high of its 120-point range from up 30 points at 67.75, to down 90 points at a six-session low at 66.55 cents. March closed up 24 points, just off the high of its 109-point range from 66.30 to 67.39 cents.
Volume increased to an estimated 24,022 lots from 21,707 lots the prior session when spreads accounted for 6,180 lots or 28%. Options volume rose to 3,952 lots (2,984 calls and 968 puts) from 2,528 lots (1,616 calls and 912 puts).
Traders awaited USDAΆs weekly crop progress report, delayed from Monday by the Independence Day holiday and set for release at 3 p.m. CDT.
The report wonΆt reflect damage from the latest thunderstorms on a sizable acreage on the Texas High and Rolling Plains, but overall benefits from rains in the semi-arid region area were expected to outweigh overall crop losses.
Some areas, however, were “hit really hard,” crop sources said. Within those areas, damage varied widely from field to field, with cotton expected to recover in some and wiped out in others.
Reports indicated the heaviest damage from windstorms, sand-blasting and hail have ranged in varying degrees on the High Plains from Wilson to south of Tahoka in Lynn County, Anton in Hockley County to Shallowater in Lubbock County and western Terry County to eastern Yoakum County.
Winds clocked as high as 70 to 80 mph at West Texas Mesonet sites turned over irrigation pivots and left some producers wondering if thinned stands can survive another blow.
While definitive damage assessments wonΆt be available for some time, the crop damage prompted conjecture that cotton acreage abandonment may be on track to exceed earlier estimates.
The USDAΆs June crop forecast reflected a U.S. 7% abandonment rate, below average but slightly above the last two seasons. The forecast preceded FridayΆs planted acreage report that producers reduced their upland plantings 198,000 acres from earlier intentions, including a 300,000-acre reduction in Texas.
Producers on the High and Rolling Plains planted 79.7% of the upland acreage in Texas and 44.6% of the U.S. upland area, according to USDAΆs National Agricultural Statistics Service.
Meanwhile, U.S. 2016-crop upland cotton under loan declined 73,292 running bales during the week ended June 26 to 923,354 RB, according to the latest USDA figures.
Upland loans outstanding included 97,616 RB of Form A issued to individual growers and 825,738 RB of Form G issued to marketing cooperatives or loan servicing agents.
Futures open interest increased 1,886 lots to 206,309 on Monday, with JulyΆs down 276 lots to 128, DecemberΆs up 763 lots to 162,244 and MarchΆs up 1,237 lots to 28,422.
Certified stocks increased 283 bales to 314,036. There were 1,514 newly certified bales and 1,231 bales decertified. Awaiting review were 6,123 bales at Memphis.
