Cotton Finishes Modestly Lower Around Midrange

Slower U.S. weekly export sales expected. Total demand for U.S. cotton in 2015-16 projected down 920,000 bales from last season, with exports expected to account for 73% of the market offtake.

Cotton futures closed modestly lower Thursday, finishing around midrange in spot December after hitting the dayΆs low in the late going.

December settled off 32 points to 63.44 cents, barely above WednesdayΆs low of 63.41. It traded from flat at 63.76 to down 61 points at 63.15 cents, skidding to the low around 1 p.m. CDT before paring the loss and ticking last at 63.56 cents.

March finished off 33 points to 63.31 cents, while December 2016 settled down 34 points at 63.42 cents.

Volume slowed to an estimated 19,300 lots from 23,214 lots the previous session when spreads accounted for 5,851 lots or 25%, EFS 89 lots and EFP nine lots. Options volume totaled 3,119 calls and 2,149 puts.

Traders expect slower U.S. export sales data to be reported by USDA at 7:30 a.m. CDT Friday for the week ended Oct. 8. The report has been delayed a day by the Columbus Day holiday on Monday.

Some expectations for current-crop sales have ranged from around 100,000 to 150,000 running bales.

Net upland sales the prior reporting week were 206,900 RB for this season and for next season jumped to 358,300 RB. All the 2016-17 sales were for Mexico, which is projected to import 880,000 bales this season. The current-crop sales were the largest since the week ended March 12.

Prices during the reporting week ended last Thursday ranged from 60.08 to 62.48 cents, basis December futures, with settlements ranging from 60.14 to 62.08 cents.

Upland export sales the last four reporting weeks have averaged 127,879 RB per week and shipments have averaged 91,418 RB.

The USDA left its October estimate of total 2015-16 demand for U.S. cotton unchanged from a month ago at 13.9 million bales, 920,000 bales below last season and the smallest since a similar offtake in 1988-89.

Exports of 10.2 million bales would account for 73% of the total use, with domestic mill consumption contributing the remainder. Although exports are projected at the lowest since 2000-01, the U.S. share of global trade is forecast to reach 30%, the second highest since 2010-11.

Global cotton exports are expected to decline for a number of major shippers, with U.S. shipments down 1.05 million bales from last season. Smaller exports also are expected from Brazil and Uzbekistan, while shipments from India and Australia are forecast to rise slightly.

World cotton imports, led by an expected reduction in China, are projected to decline for the third consecutive season. At 34.2 million bales, imports would be down from 35.5 million bales last season and a record 46.4 million bales in 2012-13.

China is forecast to import about 5.8 million bales or about 30% (corrected from Wednesday) less than in 2014-15. Moderating this decline, however, are import increases in Bangladesh, Vietnam and Turkey.

Futures open interest grew 1,970 lots Wednesday to 190,179, with DecemberΆs up 1,157 lots to 116,357 and MarchΆs up 768 lots to 54,419. Cert stocks declined 300 bales to 42,922 on 480 decertified bales and 180 newly certified bales. Awaiting review were 463 bales.