Informa is reported to have estimated the U.S. crop sharply above USDAΆs last forecast. Updated USDA crop and world supply-demand estimates wonΆt be released as scheduled on Friday.
Cotton futures settled with steep losses Monday as abatement of weather issues triggered profit-taking and stop-loss selling.
Benchmark December settled down 316 points to 84.02 cents, in the lower quarter of its 352-point range from down six points on the overnight opening to down 358 points at 83.60 cents.
December settled at a 43-point discount to March — it had traded at a premium of more than 300 points in mid-August — and finished at its lowest settlement since Sept. 16. March lost 268 points to close at 84.45 cents, 35 points off the low of its 305-point range.
A rapid expansion in open interest, attributed largely to a buildup of speculative longs, had rendered the market technically vulnerable to a sharp setback after December failed to overcome resistance at 87.92 cents.
Weekly traders-commitments reports from the Commodity Futures Trading Commission were unavailable because of the government shutdown.
Volume jumped to an estimated 39,400 lots from 12,988 lots the prior session when spreads totaled 5,271 lots or 41%, block trades 5,271 lots and EFP 11 lots. Options volume totaled 3,319 calls and 8,000 puts.
Informa Economics, Memphis-based analytical firm, has projected U.S. cotton production at 13.71 million bales, sources said, which is up from USDAΆs forecast last month of 12.899 million bales but down from the previous yearΆs crop of 17.315 million bales.
The wide gap in production estimates is mainly because of yield differences, with InformaΆs projection of 846 pounds per harvested acre up from USDAΆs 796 pounds. The five-year average is 817 pounds.
Informa is said to have projected world production at 118 million bales, up from USDAΆs 117.42 million bales, with increases forecast for the United States and India partially offset by a reduction in China.
Updated crop estimates and supply-demand forecasts wonΆt be released by USDA as scheduled on Friday, Katie Micik, DTN markets editor, reported that a USDA spokesperson confirmed in an e-mail.
The USDA last month forecast U.S. upland production at 12.273 million bales, nearly 26% below the 2012 output and the second lowest since 1989.
During the previous 20 years, the September upland crop forecast was below the final tally 11 times and above it nine times. Past differences between the September forecast and the final upland figure indicated chances were two out of three that the 2013 crop would range between 11.4 million and 13.2 million bales.
Weekly crop progress and conditions data, usually released by USDA after the market closes on Mondays, will be unavailable because of the government shutdown.
Futures open interest expanded 2,577 lots Friday to 212,142 lots, with DecemberΆs up 972 lots to 133,838 and MarchΆs up 1,379 lots to 61,160. Certificated stocks grew 918 bales to 12,827, with 16,334 bales — 789 at Galveston and 15,545 at Memphis — awaiting review.
World values as measured by the Cotlook A Index dipped 20 points Monday morning to 92.95 cents. The premium to FridayΆs December futures settlement widened six points to 5.77 cents.
