Traders awaited U.S. weekly export sales-shipments report. Some expect strong new-crop sales. IndiaΆs crop projected at the equivalent of 29.3 million 480-pound bales if the monsoon is normal.
Cotton futures finished a session of choppy price action and light volume on fractional losses Wednesday.
December closed down six points at 67.65 cents, in the upper quarter of its 105-point range from up 18 points at 67.89 to down 87 points at 66.84. It bounced around midmorning off the early morning low to within a point of the high set overnight and traded back and forth into the close.
March dipped 23 points to close at 67.29 cents, maturing July settled off three ticks at 74.41 cents and October finished down 28 points to 69.47 cents.
The market didnΆt seem to gain any inspiration from a decline to a new low since October in the U.S. dollar index.
Volume fell to an estimated 15,765 lots from 19,016 lots the prior session when spreads accounted for 4,881 lots or 26%, EFS 700 lots and EFP 19 lots. Options volume slowed to 2,053 lots (1,122 calls and 931 puts) from 5,554 lots (2,880 calls and 2,674 puts).
Traders awaited the U.S. weekly export sales-shipments report set for release by USDA at 7:30 a.m. CDT on Thursday. Some traders expect another round of strong new-crop sales. Sales for this season are expected to reflect scarce uncommitted supplies and the short time left in the marketing year.
Net upland sales for this season and next jumped to a combined seasonal high of 594,300 running bales during the prior reporting week ended June 15; 167,500 for 2016-17; and 426,800 for 2017-18.
Sales of upland the last four weeks have averaged 107,900 RB for this season and 242,900 RB for next season, while upland shipments have averaged 294,800 RB.
On the international scene, a Bloomberg report quoted Nayan Mirani, president of the Cotton Association of India, as saying the countryΆs production could climb to 37.5 million bales of 170-kilograms, largest since 2014-15, if the monsoon is normal in the main growing areas.
That would convert to 29.3 million 480-pound bales and compare with USDAΆs latest crop forecast for India of 28 million bales, up 1.5 million bales from the USDA estimate for last season.
India, expected to be the worldΆs largest cotton producer for the third consecutive season in 2017-18, is projected by USDA to account for nearly a quarter of the global crop. A rebound in cotton area with a yield near the five-year average is driving the projected crop increase.
The total cotton area in India may expand 10% from a year earlier, Mirani said. That would be a rebound from the 12% decline to 10.26 million hectares in 2016-17, Bloomberg reported, citing farm ministry data. (One hectare equals 2.471 acres.)
IndiaΆs cotton consumption is projected by USDA to rise about 2% to 24.2 million bales in 2017-18. However, owing to ChinaΆs expected reduction in yarn imports, IndiaΆs mill use is forecast below the record of 24.5 million set in 2014-15.
The higher production is expected to limit IndiaΆs need for imported cotton, projected by USDA to decline to 1.75 million bales from 2.5 million. IndiaΆs exports are forecast to remain at a relatively low 4.2 million bales.
Futures open interest dipped 62 lots to 200,457 on Tuesday, with JulyΆs down 331 lots to 506, DecemberΆs down 74 lots to 159,927 and MarchΆs up 117 lots to 26,018.
Certified stocks declined 63,131 bales to 314,986. There were 2,240 newly certified bales and 65,271 bales decertified. Awaiting review were 5,241 bales — 261 at Galveston and 4,980 at Memphis.
