Supply-demand estimates featured flat U.S. carryout and 1.2-million-bale increase in world ending stocks. Crop estimate for China surprisingly hiked.
Cotton futures settled with modest losses Friday after USDA left the projected U.S. 2013-14 carryout unchanged and raised its forecast of world ending stocks by 1.2 million bales to a new all-time high.
Spot March closed off 22 points to 82.59 cents, near the low of its 169-point range from up 127 points at 84.08 to down 42 points at 82.39 cents. It touched the high amid short-covering and was trading near there when USDA released its updated supply-demand estimates.
The May contract eased off seven points to 82.74 cents, July edged down 20 points to 82.47 cents and December closed off 11 a single tick at 77.45 cents. For the week, the market slipped 35 points in March, 19 points in May, 45 points in July and 71 points in December.
Volume based largely on electronic figures was estimated at 31,500 lots, against a cleared 27,142 lots the previous session when spreads accounted for 9,032 lots or 33%, EFP 30 lots and EFS 22 lots.
U.S. production was raised 118,000 bales from the December forecast to 13.187 million, mainly on a 200,000-bale increase to 4.3 million in Texas. Most analysts had expected a slight decrease in the crop estimate along with a modest increase in exports and a decline in ending stocks. However, some respected analysts had forecast a slight crop increase.
Planted acres were revised up a bit to a rounded 10.41 million from 10.34 million, while harvested acres slipped 120,000 acres to 7.66 million for an abandonment of 26%. Per-acre yields rose 826 pounds from 806 pounds, up from the five-year average of 817 pounds.
Export prospects rose by 100,000 bales to 10.5 million, domestic mill use was unchanged at 3.6 million bales and ending stocks remained at 3 million bales. The stocks-to-use ratio is forecast to fall to 21.3% from 23.6% a year ago.
The USDA projected the marketing year average farm price within a narrower range of 72 to 77 cents per pound, with the midpoint of 74.50 cents up a marginal 50 points from last month and up from the 2012-13 average of 72.50 cents.
Upland production rose by 108,000 bales from a month ago to 12.551 million and the Pima output by 10,000 bales to 636,000.
By regions, upland estimates dipped 32,000 bales to 4.454 million in the Southeast and 52,000 bales to 2.698 million in the Mid-South, climbed 192,000 bales to 4.529 million in the Southwest and held steady in the West at 870,000.
Globally, USDA raised production 980,000 bales to 117.81 million and reduced consumption a slight 180,000 bales to 109.50 million, resulting in an increase of 1.2 million bales to 97.61 million in ending stocks.
Those stocks would be a whopping 89.1% of consumption, up from 87.9% foreseen last month and 83.8% in 2012-13. But China is expected to account for about 60% of the carryout. Ending stocks in the rest of the world outside China edged up 200,000 bales on the month to 39.3 million, up 490,000 bales from 2012-13.
Production grew mainly in China. Despite widespread expectations for a cut, USDA upped its estimate a million bales to 33 million. Government classing data indicates that Xinjiang production, which accounts for about 60% of the total, may exceed the 2012-13 output, USDA said.
Crop estimates also rose for Argentina but declined for Pakistan, and PakistanΆs consumption also was reduced.
Futures open interest fell 866 lots Thursday to 174,670, with MarchΆs down 1,088 lots to 109,033 and MayΆs down 653 lots to 34,736.
Certificated stocks increased for the fourth consecutive day, rising 659 bales to 43,202 on new certifications of 1,572 bales and decertification of 913 bales. No cotton awaited review.
World values as measured by the Cotlook A Index dropped 30 points Friday morning to 88.10 cents. The premium to ThursdayΆs March futures settlement widened three points to 5.29 cents.
