December finished at its highest weekly close since Aug. 21. U.S. export commitments stand at 35% of the USDA estimate and shipments at 11%.
Cotton futures rallied from an early dip below lows of the previous two sessions to finish higher and near the dayΆs peak Friday.
Spot December settled up 41 points to 63.85 cents, trading within a 108-point range from down 57 points at 62.87 to up 51 points at 63.95 cents. It advanced 224 points for the week to close at its highest weekly finish since Aug. 21 and has compiled a two-week gain of 371 points.
March closed up 39 points to 63.70 cents, while December 2016 gained 34 points to settle at 63.76 cents.
Volume slowed to an estimated 16,400 lots from 19,326 lots the previous session when spreads accounted for 6,384 lots or 33%, EFP 90 lots and EFS five lots. Options volume totaled 3,135 calls and 2,849 puts.
The market rallied after sliding to the session low following lower-than-expected weekly export sales reported by USDA.
Net U.S. all-cotton export sales for shipment this season of 70,600 running bales during the week ended Oct. 8, down from 209,900 RB the previous week, boosted 2015-16 commitments to 3.48 million RB.
Commitments, which trailed year-ago bookings by 2.142 million RB, reached 35% of the USDA export forecast. A year ago, commitments were 52% of final 2014-15 shipments.
All-cotton shipments of 74,700 RB, though down from 130,800 RB the week before, hiked the total for the season to 1.107 million RB and actually nudged the lead over exports a year ago out a tad to 175,000 RB.
Exports were about 11% of the USDA projection, compared with around 9% of final shipments at the corresponding point last season.
To achieve the USDA forecast, shipments need to average roughly 204,400 RB per week, while sales averaging around 149,200 RB would match the export projection.
On the competitive pricing front, the average of the five lowest-quoted world cottons for the Far East increased 148 points to 66.45 cents during the week ended Thursday, according to USDA calculations, while the lowest-priced U.S. growth landed there rose by 110 points to 73.05 cents.
The spread thus narrowed by 38 points to 6.60 cents. The adjusted world price for the program week ahead is 46.70 cents, USDA announced, up from this weekΆs 45.22 cents. This results in a corresponding decrease to 5.30 cents in the marketing loan gain.
With the AWP firming and loan deficiency or producer option payments declining, producers have sought compensation through higher prices or higher equities on their loan cotton.
For qualities better than 31-3-35 (middling, leaf 3, staple 1-3/32nds inches), the fine count adjustment for 2015-crop cotton for the week ahead is 38 points, up from this weekΆs 22 points.
Separately, U.S. upland outstanding loans rose by 48,909 running bales to 210,611 during the week ended Monday, according to the latest USDA figures.
Entries were 177,578 bales and repayments totaled 128,669 bales. All the upland cotton under loan as of Monday was Form G issued to loan servicing agents or marketing cooperatives.
Futures open interest expanded 1,108 lots Thursday to 191,287, with DecemberΆs down 57 lots to 116,300 and MarchΆs up 975 lots to 55,394. Cert stocks were unchanged at 42,922 bales. Awaiting review were 458 bales.
