U.S. dollar index strength and favorable harvest weather in the Delta and the Texas Plains weighed on sentiment. U.S. all-cotton export commitments reached 52% of the USDA forecast.
Cotton futures reversed from a new high since Sept. 23 to close sharply lower Thursday, with spot December settling below lows of the previous three sessions.
December finished down 130 points to 69.80 cents, in the lower third of its 284-point range from up 69 points to 71.79 to down 215 points at 68.95 cents. It settled at a seven-session low close.
Strength in the U.S. dollar index and weak commodity prices weighed on sentiment, as did favorable weather for a fast-moving, high-yielding Delta harvest and for early results from the largest prospective crop on the Texas High Plains since 2010.
December twice this week has retreated from a 50% retracement (71.70) of the break from the Aug. 5 high at 77.98 to the Aug. 31 low at 65.41.
A quick, big buildup in open interest, which had jumped a combined 16,002 lots in four sessions coming into Thursday, may have contributed pressure as prices tumbled after surging 503 points or 7.5% from last weekΆs low.
March lost 137 points to close at 70.08 cents, while December 2017 shed 118 points to settle at 69.77 cents.
Volume rose to an estimated 36,009 lots from 24,343 lots (previously misstated) on Wednesday when spreads accounted for 11,559 lots or 47% and EFP 11 lots. Options volume totaled 5,272 calls and 3,532 puts.
The market leaped to the high on another round of strong U.S. export sales. All-cotton sales for shipment this season of 345,300 running bales during the week ended Oct. 13, up from 239,000 RB the prior week, brought 2016-17 commitments to 6.085 million RB, according to USDAΆs weekly data.
Commitments — outstanding sales of 3.889 million RB plus shipments — widened the lead over year-ago bookings by 241,000 RB to 2.5 million or to nearly 70%. Cumulative sales reached 52% of USDAΆs export projection, compared with year-ago bookings at 40% of final 2015-16 shipments.
All-cotton shipments of 132,500 RB, though down from 161,200 RB the previous week, brought the total for the season to 1.937 million RB, still widening the lead over year-ago exports by 67,000 RB to 764,000 or to 65%.
Exports were almost 17% of the USDA estimate, compared with about 13% of final 2015-16 shipments at the corresponding point last season.
To achieve the USDA forecast, shipments need to average roughly 231,000 RB per week over the remaining 42 weeks, while sales averaging 132,300 RB would match the export projection.
With no fresh sales again reported for next season, 2017-18 commitments remained at 428,000 RB and the lag behind forward bookings a year ago widened 9,300 RB to 150,500 RB.
Meanwhile, VietnamΆs cotton imports fell 75,407 metric tons or 346,300 statistical 480-pound bales in September, down 26.9% from a year earlier, customs data showed. Imports for the first nine months of the calendar year totaled 787,364 tons or 3.616 million SB, down 3%.
Vietnam ranked as the second largest foreign buyer of U.S. cotton for shipment this season as of Oct. 13, having booked 913,000 SB, behind only 970,000 SB for Mexico.
Futures open interest expanded 4,179 lots Wednesday to 256,940, with DecemberΆs up 530 lots to 148,414 and MarchΆs up 2,450 lots to 73,269. Certified stocks declined 528 bales to 28,367.
