Robust U.S. export sales for most markets expected to lift the U.S. share of world cotton trade dramatically. Weekly sales-shipments report will be delayed a day.
Cotton futures meandered within the previous-session range and finished narrowly ahead Wednesday, with spot March settling within 14 points of where it opened little changed overnight.
March closed up 15 points to 72.26 cents, snapping a four-session string of lower closes and finishing near the midpoint of its 53-point range from down nine points at 72.02 to up 44 points at 72.55 cents. It has retraced about 33% (72.23) of the rally from the Sept. 1 low at 65.85 to the Jan. 5 high at 75.37.
The May contract edged up 13 points to close at 72.75 cents, while December gained 17 points to settle at 70.98 cents.
Volume slowed to an estimated 20,368 lots from 26,541 lots the previous session when spreads accounted for 13,954 lots or 53% and EFP 69 lots. Options volume totaled 3,900 calls and 1,549 puts.
With 2016-17 world cotton trade forecast similar to last year and U.S. exports projected up nearly 37% to 12.5 million bales, the U.S. market share is expected by USDA to increase dramatically.
U.S. data show both accumulated exports and outstanding sales are about two-thirds higher during the first five months of the marketing year than through the corresponding period last season, USDAΆs Foreign Agricultural Service says in a world markets and trade report.
The higher U.S. export volume is supported by larger sales to China, Indonesia, Vietnam and other smaller markets. Export sales data show strong gains in most major markets, with the exception of Turkey.
U.S. commitments to China are nearly five times what they were a year ago, despite the projection for ChinaΆs 2016-17 imports to increase only marginally. Commitments to Vietnam are nearly double last yearΆs level, while its total imports are forecast up only 10%. Likewise, bookings to Indonesia have more than doubled, with imports forecast flat.
TurkeyΆs total imports are expected to decline sharply because of a larger domestic crop, FAS says. Although commitments to Turkey are down thus far, U.S. market share is considered likely to remain stable.
Commitments to Mexico are unchanged from a year ago, though total imports are forecast to increase. U.S. cotton is projected to retain a nearly 100% share of MexicoΆs imports.
Cumulative sales to the rest of the world are up a robust 80%, even though total imports in those markets are forecast unchanged overall.
Hence, the U.S. share of projected world exports of 35.64 million bales is expected to rise across the board in many markets to reach 35%, up from 26% last season and the largest since 2010-11.
The USDAΆs weekly U.S. export sales-shipments report, usually released on Thursdays, will be delayed a day by the Martin Luther King Jr. holiday on Monday.
Futures open interest declined 560 lots Tuesday to 261,756, with MarchΆs down 2,595 lots to 166,658 and MayΆs up 1,303 lots to 43,028. Cert stocks continued to grow, rising 1,058 bales to 112,556. Awaiting review were 4,491 bales — 373 at Galveston and 4,118 at Greenville.
