U.S. carryout left unchanged by USDA and world ending stocks reduced 1.2%. Crop and ending stocks forecasts for China both cut a million bales. Rest-of-world stocks projection dipped to 39.16 million bales.
Cotton futures reversed from a multi-month high to close marginally lower in spot March and narrowly mixed across the board Monday after USDA left its U.S. carryout estimate unchanged on the month and cut its world carryout forecast 1.2%.
Spot March closed off 10 points to 87.37 cents, near the low of its 180-point range from down 43 points at 87.04 to up 134 points at 88.84 cents. It posted the high, its highest intraday price since Aug. 20, ahead of USDAΆs supply-demand estimates.
May eked up five points to 87.90 cents, July edged up seven points to 87.18 cents and December eased down 12 points to 77.82 cents.
Volume slipped to an estimated 48,700 lots from 52,660 lots the previous session when spreads totaled 28,750 lots or 55%, block trades 3,000 lots, EFS 1,518 lots and EFP 98 lots. Options volume totaled 4,857 calls and 2,519 puts.
Despite what some considered compelling evidence to the contrary, USDA stuck with its estimates of U.S. exports of 10.5 million bales and ending stocks of 3 million bales. Expectations generally were for a 200,000-bale hike in exports and a corresponding cut in ending stocks.
The crop estimate was unchanged at 13.187 million bales, as expected, and domestic mill use also held steady at 3.6 million bales.
The USDAΆs average price projection for the marketing year narrowed to 74 to 78 cents at the producer level, with the midpoint of 76 cents up from 74.5 cents foreseen last month.
U.S. all-cotton ginned prior to Feb. 1 totaled 12.406 million running bales, down about 25% from 16.547 million RB a year ago. Converted to statistical bales, the 2014-crop gin total would be around 408,000 bales below the USDA production estimate. End-of-season ginning figures will be reported in March.
Globally, USDA lowered production 1.14 million bales to 116.67 million and cut ending stocks by a corresponding amount to a still record high 96.47 million bales.
World consumption was essentially unchanged at down 20,000 bales at 109.48 million, while offsetting adjustments resulted in global trade holding steady at 38.5 million bales.
The crop estimate for China fell a million bales to 32 million, reversing a surprising million-bale increase last month after “additional information about re-classing in Xinjiang” indicated lower production than previously thought.
This resulted in a million-bale reduction in ChinaΆs ending stocks to 57.31 million, 59% of the world carryout.
Ending stocks in the rest of the world outside China dipped 140,000 bales from a month ago to 39.16 million, up from 38.8 million bales in 2012-13 but down from 42.24 million bales in 2011-12.
Production estimates fell 400,000 bales to 4.1 million for Australia and 200,000 bales to 9.5 million for Pakistan, with increases for Argentina, Greece and others.
Futures open interest dropped 1,451 lots Friday to 174,481, with MarchΆs falling 9,035 lots to 67,581 and MayΆs rising 5,364 lots to 58,691. Cert stocks grew 10,491 bales to 227,301. Awaiting review were 1,430 bales.
World values as measured by the Cotlook A Index gained 110 points Monday morning to 94.15 cents. The premium to FridayΆs March futures settlement narrowed six points to 6.68 cents.
