Cotton Closes Modestly Lower on Light Volume

U.S. upland classing declined to 833,876 bales. Harvest neared completion in most of the Southeast. Ginning in the North Delta about finished. Corpus classing dwindled. Gins caught up to backlogs in the Plains. Visalia facility returned to one shift.

U.S. cotton futures reversed off a seven-session high, posted partly perhaps on short-term oversold readings, to close with modest losses on light volume Monday.

Spot March settled down 37 points to 63.32 cents, in the lower quarter of its 99-point range from up 47 points at 64.16 to down 52 points at 63.17 cents. It had snapped a six-session losing streak on Friday, prompting chart talk of a possible head-and-shoulders bottom, and followed through overnight but couldnΆt hold onto the gains.

May dipped 35 points to close at 64.11 cents, while December 2016 slipped 32 points to settle at 64.64 cents.

Volume slowed to an estimated 14,109 lots from 17,565 lots the previous session when spreads accounted for 4,163 lots or 24%, EFS 89 lots and EFP 79 lots. Options volume totaled 1,038 calls and 565 puts.

On the U.S. crop scene, upland cotton classing declined to 833,876 running bales during the week ended Thursday from 980,876 RB the previous week, according to the latest USDA figures.

Upland classing for the season rose to 9.527 million RB, down from 12.161 million graded a year ago and 78% of USDAΆs December crop estimate. A year ago, 81% of the final output had been classed.

Cotton tenderable on U.S. futures contracts held steady with the prior week at 56.1% for the season, down from 71.3% a year ago.

Classing of 30,989 RB of Pima raised the extra-long staple total for the season to 330,355 RB and the all-cotton count to 9.857 million, compared with 12.808 million at the corresponding point last season.

Ideal weather coming into last week allowed harvesting to advance uninterrupted and near completion in most areas of the Southeast, USDAΆs Agricultural Marketing Service reported in a weekly cotton review.

Producers rushed to complete fieldwork ahead of a cold front which brought moderate-to-heavy showers late in the reporting week in the lower Southeast. Gins maintained full operating schedules. A few smaller gins had completed operations for the season and some larger gins pushed to finish before the holidays.

Growers also attempted to complete fieldwork ahead of the approaching storm system and scattered rainfall in the Carolinas and Virginia.

Up to an inch of rain fell in parts of the North Delta. Ginning was drawing to a close. Localized storms brought up to 2 inches of rain to the South Delta, with lesser amounts reported in several areas. Topsoil moisture was rated adequate to surplus throughout the region.

The Corpus Christi classing office continued to receive samples from eastern Texas and graded 2,031 RB to nudge the total for the season to 756,236 RB, down from 1.706 million RB a year ago. Ginning was completed in South Texas and the Rio Grande Valley.

Snow fell early in the period in the upper Texas High Plains. Module hauling was limited mostly to short periods during early mornings when the ground was frozen solid. Gins caught up to module backlogs. Harvesting resumed and neared completion in most areas after warmer, drier weather returned. Fields off the Caprock were estimated 20% to 40% harvested.

Ginning was about 60% completed in Arizona and saw and roller ginning continued in CaliforniaΆs San Joaquin Valley. The Visalia classing office returned to operating one eight-hour shift.

Futures open interest fell 2,867 lots Friday to 186,572, with MarchΆs down 3,474 lots to 130,283 and MayΆs up 76 lots to 30,228. Cert stocks were unchanged at 65,238 bales.