Cotton futures settled a bit mixed Thursday, a day after plunging to the biggest one-day percentage loss in 14 months.
Benchmark December, which finished Wednesday down 5.2%, eased off six ticks to settle at 84.18 cents, the only contract in the red. It posted a 95-point gain to 85.19 cents, slipped to a 33-point loss to 83.91 cents — a new 25-session low — and bounced to close just below unchanged, still in the lower quarter of the 128-point range.
October eked out a four-point gain to settle at 3.95 cents and March gained 29 points to close at 83.63 cents.
Volume slipped to an estimated 27,200 lots from 51,773 lots the previous session when spreads totaled 14,226 lots or 27% and EFP 153 lots. Options volume totaled 3,354 calls and 9,478 puts.
A prospective record crop in India has resulted in an overall increase in Cotton OutlookΆs world production forecast for 2013-14, while its projection of global consumption also has been adjusted upward.
The crop gain for India more than offset a further reduction in the United States, where drought has limited production in the West Texas Plains and too much rain has dented prospects in the Southeast.
Cotton Outlook said the estimate for India still could prove to be understated. IndiaΆs crop has benefitted from timely and plentiful monsoon rains.
The Indian crop is estimated at 6.375 million metric tons (29.28 million 480-pound bales), up from 6.120 million tons (28.11 million bales) forecast a month ago.
The Cotton Association of India earlier this week pegged the crop at 29.07 million bales, up from USDAΆs August forecast of 28 million. India is the worldΆs second largest cotton producer behind China and second largest exporter behind the United States.
World production is forecast by Cotton Outlook at 25.689 million tons (117.99 million bales), against 25.537 million tons (117.29 million bales) foreseen last month.
Although what it called some retrospective adjustments have resulted in changes in Cotton OutlookΆs consumption data, the gain in mill use from 2012-13 to 2013-14 still is projected at a “rather pedestrian 2%.”
Global consumption is forecast at 23.741 million tons (109.04 million bales), up from the previous estimate of 23.396 million tons (107.46 million bales).
“The cotton textiles sector in China continues to be hampered by the governmentΆs cotton policies,” Cotton Outlook said, “and recent economic developments in India and certain Southeast Asian countries have been far from helpful.”
Cotton OutlookΆs estimates now show world production exceeding consumption by 1.948 million ton (8.95 million bales), compared with 2.141 million tons (9.83 million bales) projected last month.
Futures open interest fell 12,798 lots Wednesday to 197,189, with DecemberΆs down 13,256 lots to 152,431 and MarchΆs up 326 lots to 33,557. Certificated stocks declined 3,776 bales to 37,131.
World prices as measured by the Cotlook A Index fell 370 points Thursday morning to 89.85 cents. The premium to WednesdayΆs December futures settlement widened 92 points to 5.61 cents.
