Analysts foresee unchanged U.S. crop estimate from a month ago, 200,000-bale cut in exports and a corresponding increase in ending stocks. Weekly export sales report also scheduled.
Cotton futures settled slightly mixed Wednesday in front of the monthly U.S. crop forecast and updated domestic and world supply-demand estimates on Thursday.
Benchmark December closed down 12 points to 84.35 cents, in the lower half of its tight 66-point range between 84.18 and 84.84 cents. The high was its highest intraday print since Aug. 28.
October eased five points to 84.80 cents and March gained 13 points to 83.49 cents. The other traded contracts through December 2014 settled up 14 to 27 points.
Volume dipped to an estimated 13,200 lots from 13,591 lots the previous session when spreads totaled 5,545 lots or 41%, EFS 50 lots and EFP 32 lots. Options volume totaled 806 calls and 1,709 puts.
A survey of cotton analysts by Dow Jones Newswires pegged U.S. crop prospects at an average of 13.1 million bales, essentially unchanged from USDAΆs August estimate 13.053 million.
The estimates ranged from 12.8 million to 13.9 million bales. The USDAΆs first survey-based forecast last month shaved the crop 447,000 bales from the July estimate and was nearly 4.3 million bales below last seasonΆs production.
Smaller crop prospects are the result of both reduced plantings and a lower national yield. Based on the August forecast, the planted area was estimated at 10.2 million acres, slightly below the June acreage report.
With planted area down 17% from a year ago, the harvested area was projected to decline by a similar amount and was forecast at 7.7 million acres. This reflected an abandonment of 24%, equal to the 2012 rate.
A yield forecast of 813 pounds per harvested acre was well below last seasonΆs 887-pound record but near the five-year average of 817 pounds.
Production estimates ranked the Southeast as the leading cotton region for the third consecutive season, a first in at least a century, with an output of 4.45 million bales. Area, abandonment and yield were all near the five-year average for the region.
A third year of drought has been primarily responsible for large abandonment in the Southwest, while the cotton area in the Mid-South fell significantly owing to the viability of alternative crops this season.
In the West, smaller plantings and a yield decline from last seasonΆs record have kept the crop at a historically low level. Upland production was projected at only 952,000 bales, third lowest since the mid-1940s.
U.S. crop development has continued to lag behind last year and the five-year average. Boll opening at 24% as of Sept. 8 was down from 45% a year ago and 40% on average. This leaves much of the crop vulnerable to an early freeze or wet harvest weather.
Analysts in the Dow Jones survey also estimated exports at an average of 10.4 million bales within a range from 10 million to 10.6 million and ending stocks at 3 million bales within a range from 2.8-4.2 million.
Those estimates compared with USDAΆs August forecasts of 10.6 million bales for exports and a carryout of 2.8 million, against last seasonΆs 13.1 million and 3.8 million bales, respectively.
Some expectations for U.S. weekly export sales, also scheduled for release Thursday, range slightly on either side of the previous weekΆs net all-cotton total of 173,300 running bales.
Futures open interest snapped a string of 14 consecutive declines on a gain of 125 lots Tuesday to 169,296, with DecemberΆs down 35 lots to 118,887 and MarchΆs up 203 lots to 37,798.
Certificated stocks declined 178 bales to 18,028 on nine newly certified bales and decertification of 187 bales. Awaiting review were 2,296 bales.
World values as measured by the Cotlook A Index rose 60 points Wednesday morning to 90 cents. The premium to TuesdayΆs December futures settlement narrowed 37 points to 5.53 cents.
