Slowdown again expected in U.S. weekly export sales. Supply-demand report on Monday expected to show higher exports, lower carryout.
Cotton futures settled mostly little changed in slowed, tight-range dealings as traders awaited fresh input Wednesday.
Spot March closed up 12 points to 85.52 cents, in the upper half of its 62-point range from down 30 points at 85.10 to up 32 points at 85.72 cents. It touched the low twice and the high twice, testing TuesdayΆs low and stalling shy of TuesdayΆs high.
May settled unchanged at 86.08 cents and July eked out a three-point gain to 85.64 cents, while December eased down two points to 76.94 cents.
Volume slowed to an estimated 19,800 lots from 22,915 lots the previous session when spreads totaled 13,354 lots or 58%, EFS 431 lots and EFP 60 lots. Options volume totaled 1,929 calls and 1,349 puts.
A slowdown again is expected in U.S. weekly export sales scheduled for release by USDA at 7:30 a.m. Thursday. Upland sales the previous two reporting weeks have topped expectations on a combined total of nearly a million running bales, including 479,700 bales in the week ended Jan. 23.
The report Thursday will be for the week ended Jan. 30 when March futures ranged intraday from 88.19 to 83.66 cents and from 87.21 to 84.25 cents on a closing basis. Settlements averaged 85.48 cents.
Prices need to ration demand, many analysts agree. Robust export sales have steadily diminished uncommitted cotton in a total U.S. supply — beginning stocks plus the crop — currently estimated at a 29-year low.
The USDA in its updated supply-demand report on Monday is widely expected to boost its export forecast from the January estimate of 3 million bales and reduce its U.S. carryout estimate by 300,000 to 500,000 bales from last monthΆs projection of 3 million bales.
Also, ginning and classing figures have hinted that the crop may not reach the January estimate. However, USDA isnΆt expected to revise its January production estimate until April when it will have in hand the end-of-season ginning data from March. Those figures then will be tweaked in the final 2013 crop report in May.
World production in 2013-14 is estimated at 117.924 million bales by Informa Economics, Memphis-based analytical firm, sources said. This is up slightly from 117.81 million bales estimated by USDA last month but down slightly from 118.22 million bales forecast by the International Cotton Advisory Committee this month.
Cotton Outlook last month shaved its estimate of the addition of world stocks this season to 1.495 million metric tons (6.87 million 480-pound bales) from 1.548 million tons (7.11 million bales) it had projected in December.
That compares with an addition of 8.31 million bales forecast by USDA. However, Cotton OutlookΆs estimates continued to indicate that China will absorb the majority of this seasonΆs surplus of world production over consumption and that stocks outside that country will rise only marginally in 2013-14.
Futures open interest dropped 270 lots Tuesday to 176,175, with MarchΆs down 3,690 lots to 80,754 and MayΆs up 2,149 lots to 50,634. March options expire Friday and first notice day is Feb. 24.
Certificated stocks grew 10,065 bales to 188,752. There were 10,117 newly certified bales, 52 bales decertified and 3,275 bales awaiting review.
World values as measured by the Cotlook A Index gained 35 points to 92.30 cents. The index premium to TuesdayΆs March futures settlement narrowed four points to 6.90 cents.
