December eased 13 ticks from its high close for the move. Light May delivery notices expected. Weekly export sales-shipments report eyed.
Cotton futures finished in the red beyond May but closed well off the lows after falling to a five-session low in most-active July Wednesday.
July settled off 61 points to 92.64 cents, 191 points off the low and in the upper third of its 258-point range from up six points at 93.31 to down 252 points at 90.73 cents.
May gained 189 points to close at 92.90 cents, its highest finish since March 31. December, flashing overbought technical readings after closing higher four sessions in a row posting a new high close for the move on Tuesday, eased off 13 ticks to settle at 82.36 cents.
Light deliveries are expected on first notice day for May on Thursday in view of the recent widening of the May discount to beyond full carry. Deliverable stocks would be carried forward, similar to what happened on the March contract. Notices are scheduled to be posted Wednesday night.
Volume quickened to an estimated 33,400 lots from 20,859 lots the previous session when spreads totaled 8,564 lots or 41%, EFP 270 lots and EFS 67 lots. Options volume totaled 2,517 calls and 1,347 puts.
Traders awaited the U.S. export sales-shipments report for the week ended April 17. The report is to be released by USDA at 7:30 a.m. CDT on Thursday. Traders will keep an eye on old-crop cancellations.
Closing July prices during the reporting week averaged 91.79 cents within intraday ranges from 90.02 to 92.91 cents. For December, settlements averaged 81.21 cents and intraday prices ranged from 80.70 to 81.94 cents.
Old-crop sales rebounded the previous reporting week after cancellations exceeded gross sales during the week ended April 3 for the first time since June 2012.
Net upland sales for shipment this season totaled 84,700 running bales during the week ended April 10 — a six-week high — and have averaged about 34,600 RB during the last four reporting weeks.
But the narrow spread between July futures and the Cotlook A Index of world values has suggested a loss of price competitiveness for U.S. cotton. The steady growth of stocks in deliverable position would seem compatible with that indication.
Shipments of upland have remained strong and above the weekly average needed to reach the USDA export estimate, though dipping to 280,200 RB for the week ended April 10. The four-week average is about 272,500 RB.
Sales for shipment next season also have remained strong, climbing to 134,100 bales of upland during the week ended April 10 when China booked 34%. China is the top U.S. all-cotton export buyer this season, with 23% of the 2013-14 commitments, but has booked only 1% of the 2014-15 sales.
Futures open interest increased 2,153 lots Tuesday to 174,835, with MayΆs down 1,861 lots to 5,843, JulyΆs up 2,435 lots to 107,871 and DecemberΆs up 1,369 lots to 55,087.
Certificated stocks grew 2,260 bales to 294,377. There were 2,348 newly certified bales, 88 bales decertified and 6,672 bales awaiting review for a potential total of 301,049.
The 2013-14 Cotlook A Index gained 100 points Wednesday morning to 94 cents. The premium to TuesdayΆs July futures settlement narrowed four points to just 75 points.
The Forward A Index for 2014-15 rose 40 points to 90.50 cents, widening the discount to the 2013-14 index by 60 points to 3.50 cents and narrowing the premium to TuesdayΆs December futures close by 10 points to 8.01 cents.
