Traders looked ahead to U.S weekly export sales-shipments report. China ranked as the top export customer for U.S. cotton in 2013-14 and Turkey leads in forward sales for 2014-15.
Cotton futures finished with modest gains in most contracts on light volume Wednesday as traders looked ahead to a report on U.S. weekly export sales and shipments.
Benchmark December edged up 17 points to close at 68.08 cents, just above the midpoint of its tight 85-point range from up 49 points at 68.40 to down 36 points at 67.55 cents.
Spot and thinly traded October eased off three points to close with the only loss at 68.77 cents and March matched DecemberΆs gain, settling up 17 points to 68.73 cents.
Volume slowed to an estimated 8,900 lots from 13,897 lots the previous session when spreads accounted for 2,500 lots or 18% and EFS 263 lots. Options volume totaled 10,362 lots — 5,982 calls and 4,380 puts — to exceed the futures turnover.
Solid new-crop sales appear generally expected in the USDA export report scheduled for release at 7:30 a.m. CDT on Thursday for the week ended July 17.
The reporting week encompassed the release of USDAΆs supply-demand estimates on July 11. Combined sales of 364,200 running bales during the week ended July 10 were the largest since the week ended May 15.
With the 2013-14 marketing year nearing an end, China, the worldΆs top cotton importer, has remained the leading buyer of U.S. cotton for this season, though its purchases have slowed in recent weeks.
A National Cotton Council ranking of the top export customers shows China with purchases of 2.877 million bales or 26% of the sales to all destinations, followed by Turkey with 2.155 million bales or 19% and Mexico with 1.147 million bales and Vietnam with 1.081 million bales, both rounded to 10%.
For 2014-15, the leading buyers are Turkey with 758,000 bales or 25%, Mexico with 635,000 bales or 21%, and South Korea and China with 274,000 bales and 262,000 bales, respectively, for a rounded 9%.
ChinaΆs imports in 2014-15 are expected to decline by 5.5 million bales to 8 million under the transition to a target price system from its price support program through stockpiling.
Details of the new program have been expected by the end of July but reports now have indicated may be delayed into August.
Customs figures released earlier this week showed China imported 218,219 metric tons of cotton (1.002 million bales) in June, down 19% from a year earlier.
Futures open interest gained 237 lots to 153,458, with DecemberΆs up six lots to 120,342 and MarchΆs up 151 lots to 25,752. Certificated stocks continued to decline, dropping 30,440 bales to 205,767.
World prices as measured by the Cotlook A Index edged up 10 points Wednesday morning to 83.15 cents. The premium to TuesdayΆs October futures settlement narrowed 18 points to 14.35 cents.
Forward A Index values for 2014-15 rose five points to 75.60 cents, widening the discount to the 2013-14 index by five points to 7.55 cents and narrowing the premium to TuesdayΆs December futures close by 17 points to 7.69 cents.
