Profit-taking suspected. Mills boosted unpriced on-call sales in old-crop contracts to 7.77 million bales. Classing figures also had indicated the U.S. crop would come in shy of the January estimate.
Cotton futures traded on both sides of unchanged and settled mixed Friday, down in old-crop deliveries and up 10 to 48 points in new-crop contracts.
May dropped 60 points to settle at 84.52 cents, in the lower quarter of its 132-point range down 89 points at 84.23 to up 43 points at 85.55 cents. It reversed from a move above the prior-day high but still finished up 243 points or 2.96% for the week.
July dipped 36 points to 84.19 cents, trading within a 98-point range from 83.92 to 84.90 cents, and December gained 23 points to 78.72 cents after posting a new contract high, the seventh in the last two weeks, at 78.74 cents. For the week, July gained 184 points and December 167 points.
Suspected profit-taking ahead of the weekend may have weighed on the old-crop contracts after May had jumped as much as 598 points or 7.4% at this week’s high from last week’s low. Drought in the Texas Plains offered new-crop support.
Volume slowed to an estimated 31,500 lots from 43,675 lots the previous session when spreads accounted for 19,443 lots or 45%, EFS 162 lots and EFP 45 lots. Options volume declined to 8,525 lots (3,744 calls and 4,781 puts) from 11,900 lots (6,903 calls and 4,997 puts).
Mills boosted their unpriced on-call sales in old-crop contracts 1,175 lots to 77,669 (7.767 million bales) last week, according to data reported by the Commodity Futures Trading Commission after the close Thursday.
Producers priced a net 85 lots to shave their unfixed position to 7,976 lots or 797,600 bales. The net call difference thus increased 1,090 lots to 69,693, which was 34.9% of the old-crop open interest, down from 36.8%. The ratio of potential buying to potential selling was up fractionally to 9.74:1 from 9.6:1.
A year ago, the ratio was 15.1:1 on unpriced positions of 80,096 lots for mills and 5,268 lots for producers, while the net call difference was 35.2% of a larger OI.
On the crop scene, U.S. cotton ginned to March 1, confirming that production would come up short of the January USDA estimate, had been somewhat foretold by earlier classing figures. The January estimate was up 23.8% from last season’s crop.
All-cotton ginning of 19.599 million RB, up 18.4% from a year ago, led USDA — as reported Thursday — to reduce its 2017-18 production estimate 230,000 statistical bales to 21.03 million. Upland ginning of 18.921 million RB was up 18.1% from 16.024 million a year ago.
An unusually large 898,500 running bales still to be ginned this late in the season, as estimated by ginners, leaves room for more crop tweaking in the final report on May 10. The large bulk yet to be ginned is believed to be in the Southwest where crops in some areas exceeded gin capacity.
By regions, upland ginning totaled 4.431 million RB in the Southeast, up from 3.644 million a year ago; 4.255 million in the Mid-South, up from 3.267 million; 9.409 million in the Southwest, up from 8.475 million; and 676,950 in the West, up from 637,650.
Futures open interest gained 527 lots to 269,244 on Thursday, with May’s up 502 lots to 129,782 and July’s down 1,388 lots to 58,030. Certified stocks were unchanged at 87,328 bales. Awaiting review were six bales at Galveston.