Market shrugged off healthy U.S. weekly export sales which lifted 2014-15 commitments to 1.45 million running bales ahead of year-ago bookings. Rain forecasts may have contributed to pressure.
Cotton futures shrugged off healthy U.S. weekly export sales to settle at a three-session low close in benchmark December Thursday.
December, which didnΆt trade on the plus side throughout the session, finished down 88 points to 66.58 cents, even with the prior-session low. It settled in the lower half of its 132-point range from down two points at 67.44 to down 134 points at 66.12 cents.
Nearby October lost the most, settling down 116 points to 67.14 cents, and March closed off 63 points to 67.18 cents.
Favorable U.S. cotton weather forecasts may have contributed to negative sentiment in an overbought market, including scattered showers and thunderstorms capable of producing heavy rainfall Thursday afternoon and night in the Texas High Plains.
Rain would help cotton on the Plains to fill out bolls and carry more of the crop to maturity. However, lack of adequate moisture on a large dryland acreage during the past month or so has resulted in an irretrievable loss of a significant portion of earlier yield prospects.
Volume slowed to an estimated 18,600 lots from a final 23,624 lots the previous session when spreads totaled 7,863 lots or 33% and EFP 139 lots. Options volume totaled 5,323 calls and 5,161 puts.
Net all-cotton export sales for shipment this season of 250,600 running bales during the week ended Aug. 21, up from 158,200 bales the previous week, brought commitments to 5.022 million RB.
Commitments — outstanding sales plus shipments — widened the lead over bookings a year ago to 1.45 million RB and reached about 48% of the USDA export forecast. A year ago, commitments amounted to about 37% of final 2013-14 exports.
All-cotton shipments of 100,200 RB, against 109,900 RB the week before, nudged exports for the season to 309,200 bales. Shipments trailed year-ago exports by 465,100 bales.
The slow shipments pace — not unexpected — is associated mainly with tight supply availability ahead of the volume movement of the new crop.
To achieve the USDA estimate, shipments need to average roughly 205,500 running bales a week, while sales averaging around 109,300 RB would match the export forecast.
Upland sales for 2015-16 of 16,700 bales, against none the prior week, included 7,800 bales for Mexico and 5,300 for South Korea. Commitments for 2015-165 were 45,400 bales, compared with forward sales a year ago of 155,900 bales.
Futures open interest expanded 2,837 lots Wednesday to 175,577, with DecemberΆs up 699 lots to 112,821, MarchΆs up 1,922 lots to 47,462 and MayΆs up 1,011 lots to 6,154. Cert stocks dipped 265 bales to 71,232.
World values as measured by the Cotlook A Index gained 30 points Thursday morning to 76.05 cents, narrowing the premium to WednesdayΆs December futures settlement by 27 points to 8.59 cents.
