December slipped to a contract low close. Traders looked ahead to the weekly export sales report. The U.S. share of world 2014-15 cotton trade projected at 29%, highest since 2010-11.
Cotton futures settled with a small loss at a contract low close in benchmark December Wednesday after jumping to a triple-digit gain above highs of the previous three sessions.
December closed down 11 points to 67.64 cents, in the lower quarter of its 174-point range from up 139 points at 69.14 to down 35 points at 67.40 cents. It fell below lows of the previous two sessions but held above FridayΆs intraday contract low of 67.10 cents.
Volume rose to an estimated 15,900 lots from 14,723 lots the previous session when spreads totaled 24% and EFP 20 lots. Options volume totaled 7,034 calls and 3,124 puts.
Traders looked ahead to the U.S. export sales-shipments report for the week ended July 10 to be released by USDA at 7:30 a.m. CDT on Thursday. Upland sales for 2014-15 quickened the previous week to 203,200 running bales.
Talk has circulated this week of fresh mill buying interest, but expectations for new-crop sales in ThursdayΆs report have ranged on both sides of the prior weekΆs bookings.
New-crop export commitments through July 3 had reached 27% of USDAΆs updated July projection, compared with forward sales a year ago of 21% of the current estimate of 2013-14 exports.
With projections calling for a much larger available supply, USDA raised its 2014-15 export estimate 500,000 bales from a month ago to 10.2 million. Despite the increase, exports remain projected below those of 2013-14 as world trade is expected to decline in 2014-15.
The U.S. share of world cotton trade is projected near 29%, up from 26% this season and the highest since 2010-11 when it was 40%.
Global cotton trade is forecast to fall 12% from this season to 35.6 million bales, lowest since 2010-11. This is mainly because of reduced shipments to China, where imports are expected to decline by 5.5 million bales to 8 million.
Overall demand for U.S. cotton now is forecast at 14 million bales in the marketing year beginning Aug. 1, nearly matching the 14.1 million bales estimated for 2013-14.
U.S. mill use is forecast to rise about 5.5% in 2014-15 as expanding domestic mill capacity is expected to push consumption to 3.8 million bales, the highest in four seasons.
Futures open interest dropped 567 lots Tuesday to 149,928, with DecemberΆs down 145 lots to 118,458 and MarchΆs down 281 lots to 24,479. Cert stocks declined 45,759 bales. There were 3,953 newly certified bales, 49,712 bales decertified and 6,384 bales awaiting review.
World values as measured by the Cotlook A Index fell 50 points Wednesday morning to 83.05 cents. The premium to TuesdayΆs spot October futures settlement narrowed 15 points to 14.80 cents.
Forward A Index values for 2014-15 dipped 20 points to 75.70 cents, narrowing the discount to the 2013-14 index by 30 points to 7.35 cents and widening the premium to TuesdayΆs December futures close by 35 points to 7.95 cents.
