U.S. cotton plantings projected up 14.2% to 11.5 million acres in USDA analytical forecast. Record soybean acreage and lower corn plantings seen. Export sales report set Friday.
Cotton futures settled up nine to 88 points in contracts through the 2017-18 marketing year, led by maturing March, in another round of slow trading Thursday.
Most-active May gained 61 points to close at 76.10 cents, just above the midpoint of its 121-point range from down four points at 75.45 cents to up 117 points at 76.66 cents. It opened flat overnight, quickly hit the session low and touched the high not long before noon central time.
March settled at 75.02 cents, trading within a 43-point range from 74.96 to 75.39 cents. July gained 40 points to close at 76.92 cents and December edged up 14 points to 73.89 cents.
Volume remained light at an estimated 15,909 lots, down from 18,466 lots the previous session when spreads accounted for 7,340 lots or 40%, EFS 1,143 lots and EFP 90 lots. Options volume declined to 2,115 lots — 1,622 calls and 493 puts — from 3,136 lots.
U.S. cotton plantings are expected to increase 1.4 million acres or 14.2% to 11.5 million this year, according to a USDA analytical forecast reported Thursday at the Agricultural Outlook Forum.
That would be the largest planted area since 2012 and extend a rebound from the lowest plantings in 2015 (8.58 million acres) since 1983. Larger production would push 2017-crop cotton prices down a projected 4 cents a pound to 65 cents, the report indicated.
Increases have been widely expected after the National Cotton CouncilΆs early survey of producers showed intentions to plant 11 million across the 17-state Cotton Belt, up 9.4%. The expectations have been based largely on price considerations.
The report by USDA Chief Economist Robert Johansson also projected an increase in soybean plantings to a record 88 million acres, up 4.6 million acres. Many of those acres likely would come out of corn, where USDA forecast a decline of 4 million acres to 90 million.
Per-bushel price projections put soybeans at an average of $9.60 for the 2017-18 marketing year, up about 1.1%, and corn at $3.50, up about 3%.
The report projected 2017 wheat acres to fall 8.3% to 46 million, with the price forecast up 12% to $4.30 per bushel.
The USDA will unveil its first U.S. and world cotton supply-demand forecasts for 2017-18 at the forum on Friday. A significant increase would seem likely in U.S. ending stocks from the current 2016-17 estimate of 4.8 million bales, an eight-year high.
Meanwhile, traders awaited USDAΆs U.S. weekly export sales report scheduled for release at 7:30 a.m. CST on Friday for the week ended Feb. 16. The report has been delayed a day by the holiday on Monday.
Sales of upland, which have been running far ahead of the pace needed to match the USDA export forecast, were 222,200 running bales the prior week and upland shipments were a strong 344,900 RB. Upland sales the last four weeks have averaged 236,100 RB a week and upland shipments have averaged 344,000 RB.
Futures open interest declined 723 lots Thursday to 260,871, with MarchΆs down 109 lots to 279 and MayΆs down 806 lots to 161,424. Stocks in deliverable position grew 4,794 bales to 323,159.
