Cotton futures fell to steep closing losses Monday as benchmark December posted its fifth new low finish for the move in a row.
December settled down 185 points to 70.21 cents, in the lower quarter of its 206-point trading range after opening unchanged at 72.06 cents and falling to 70 cents. It closed 196 points from its contract low.
Perceptions of favorable crop conditions and sluggish demand along with weak technical factors have continued to weigh on sentiment.
Volume rose to an estimated 18,500 lots from 12,053 lots the previous session when spreads totaled 2,661 lots or 22%, EFP 79 lots and EFS 12 lots. Options volume totaled 5,553 calls and 6,863 puts.
U.S. upland growers had contracted about 6% of their expected acreage coming into July, according to informal surveys conducted by the cotton division of USDAΆs Agricultural Marketing Service.
This was the same percentage as a month earlier but involved a larger acreage under contract because the survey was based on the June planted acreage report and the previous survey on the March intentions data.
The contracted acreage is down from 11% a year ago and the smallest since 2009 when only 2% had been booked. The survey estimates donΆt include cotton consigned to marketing organizations but do include cotton contracted with them.
By regions, bookings included 11% in the Southeast, against 32% a year ago; 9% in the Mid-South, down from 15%; 4% in the Southwest, up from 2%; and less than 0.5% in the West, compared with 3% last year.
Fields were in full bloom last week in South Texas and the first open bolls were seen in the Rio Grande Valley, traditional source of the nationΆs first new-crop supplies.
More white blooms appeared at the tops of plants in the valley as the crop there neared cutout. Industry people were described as encouraged by the crop progress and good growing conditions.
Meanwhile, trend-following funds sold 9,224 lots in cotton futures-options combined to chop their net long position by 38% to 5,618 lots during the week ended July 1, according to the latest supplemental traders-commitments data from Commodity Futures Trading Commission.
Index funds bought 171 lots to nudge their net longs up to 64,248 lots, while traders with non-reportable positions sold 2,847 lots to reverse to net short 2,342 lots from net long 505 lots.
Commercials bought 11,900 lots, covering 6,776 shorts and adding 5,124 longs to reduce their net shorts to 67,526 lots. In futures only, non-commercials cut their net longs by 5.9 percentage points to 8.3% of the open interest, which rose by 788 lots to 146,236.
Futures open interest increased 1,327 lots Thursday to 147,516, with JulyΆs down six lots to 1,883, DecemberΆs up 236 lots to 120,531 and MarchΆs up 1,023 lots to 19,444.
Certificated stocks declined 43,590 bales to 418,994. There were 3,959 newly certified bales, 47,549 bales decertified and 14,122 bales awaiting review.
World values as measured by the Cotlook A Index were unchanged from Friday at 86.90 cents. The premium to ThursdayΆs July futures settlement narrowed three points to 10.68 cents.
Forward A Index values for 2014-15 also were unchanged at 79.60 cents, leaving the discount to the 2013-14 index at 7.30 cents and narrowing the premium to ThursdayΆs December futures close by nine points to 7.54 cents.
