Mills priced 2,695 on-call lots in December last week. Demonization of high-denomination banknotes has disrupted IndiaΆs cotton markets. U.S. upland cotton under loan rose to 2.42 million running bales.
Cotton futures settled mostly slightly lower Friday as most-active March snapped a four-session string of higher closes, remaining within the overnight range and the prior dayΆs price band.
March closed down 22 points to 72.32 cents, trading within a 101-point range between down 95 points at 71.59 and up 6 points at 72.60 cents. It gained 329 points for the week.
December inched up two points for the day and 496 points for the week to settle at 73.40 cents, while December 2017 eased 13 points for the day and gained 191 points for the week to close at 70.78 cents. Two sessions now remain before first notice day.
Volume slowed to an estimated 34,292 lots from 55,813 lots the prior session when spreads accounted for 22,543 lots or 40%, EFP 458 lots and EFS 538 lots. Options volume totaled 2,689 calls and 7,564 puts.
Mills priced 2,695 on-call lots in December last week and producers priced 633 lots, according to the latest report from the Commodity Futures Trading Commission.
This reduced the unpriced positions to 13,535 lots on the mill side and 8,327 lots on the producer side. The net call difference dropped 2,062 lots to 5,208 lots, which represented 12.09% of DecemberΆs declining open interest, compared with 6.57% a week earlier.
With first notice day seven trading sessions ahead at the time, mills had 1.63 contracts on which to fix prices to every one held by producers.
Elsewhere, mills added 2,389 lots in March, 1,122 lots in May, 1,764 lots in July and 457 lots in December 2017. Producers added 683 lots in March, 67 lots in May, 126 lots in July and 271 lots in December 2017.
On the international scene, a demonetization of high-denomination banknotes by the prime minister has disrupted IndiaΆs cotton markets, reports have indicated.
Physical cotton supplies in India have dried up since the demonization, Dow Jones Newswires reported earlier this week, citing a report by the Commonwealth Bank of Australia.
Indian farmers, who normally are paid in cash for their cotton, are withholding supplies until greater certainty over payment is restored, the report said.
The CBA indicated it expects this to be a short-term situation, noting that IndiaΆs cotton harvest has been progressing under largely favorable conditions. Still, it said prices could continue rising until liquidity improves and the trade quits worrying about sourcing cotton.
IndiaΆs crop, the worldΆs largest, is estimated by USDA at 27 million 480-pound bales, up from 26.4 million bales last season, with yields expected to offset a reduction in cotton area.
On the U.S. crop scene, outstanding upland loans rose by 549,008 running bales to 2.422 million RB during the week ended Monday, USDA reported. Entries were 694,790 RB and repayments were made on 145,782 RB.
Upland cotton under loan included 234,774 RB of Form A issued to individual growers and 2,187,199 RB of Form G issued to marketing cooperatives or loan servicing agents.
Futures open interest expanded 4,179 lots Thursday to 250,111, with DecemberΆs down 4,318 lots to 14,483 and MarchΆs up 6,040 lots to 174,428. Cert stocks grew 1,051 bales to 49,133. There were 1,403 newly certified bales and 352 bales decertified.
