U.S. weekly export sales expectations reported mostly from 150,000 to 200,000 bales. Share of world trade would be the second lowest of the century. Loan differentials announced.
A cotton futures surge from modest losses and new lows for the move to intraday peaks above TuesdayΆs highs culminated with triple-digit closing gains Wednesday.
Most-active July gained 123 points to close at 86.65 cents, in the upper half of its 247-point range from down 37 points at 85.05 cents to up 210 points at 87.52 cents.
Spot May settled up 130 points to 84.65 cents, trading within a 249-point range from 82.97-85.46, and December closed up 112 points to 85.87 cents, moving within a 223-point span between 84.50-86.73.
Volume dipped to an estimated 31,600 lots from 36,897 lots the previous session when spreads totaled 17,123 lots or 46%, EFS 4,138 lots, block trades 475 lots and EFP 284 lots. Options volume totaled 4,746 calls and 2,268 puts.
Trade estimates on U.S. export sales for shipment this season during the week ended April 11 range mostly from around 150,000 to 200,000 running bales, sources said. Net all-cotton sales the previous week totaled 152,700 bales, including 147,100 of upland and 5,600 of Pima.
The USDAΆs Foreign Agricultural Service will release data on weekly export sales and shipments at 7:30 a.m. CDT Thursday.
In its April supply-demand report, USDA raised its 2012-13 export estimate by 250,000 bales to 13 million. The increase, as generally expected, reflected strong shipments in recent weeks and higher import demand expectations for China.
The new export forecast, while up 1.3 million bales from last season, is equal to the five-year average. Similarly, the U.S. share of world trade is expected to rise to 30% from 26% in 2011-12. However, the world share would be the second lowest of the century, according to USDA.
Meanwhile, loan rate differentials for 2013-crop upland and extra long staple cotton have been announced by USDAΆs Farm Service Agency.
The differentials, also referred to as loan rate premiums and discounts, have been calculated based upon market valuations of various cotton quality factors for the prior three years. This procedure is identical to that used in past years.
The Commodity Credit Corp. adjusts loan rates by the differentials so that cotton loan values reflect the differences in market prices for color, staple length, leaf, extraneous matter, micronaire, length uniformity and strength.
The 2013-crop differential schedules are applied to loan rates of 52 cents a pound for the base quality of upland and 79.77 cents for ELS or Pima cotton. The loan rate for an individual bale is based on the quality determined by Agricultural Marketing Service classing measurements.
Futures open interest fell 5,314 lots Tuesday to 184,661, with MayΆs down 8,173 lots to 210,362, JulyΆs up 3,488 lots to 113,047 and DecemberΆs down 633 lots to 48,888.
Certificated stocks grew 5,732 bales to 468,135. There were 16,646 bales awaiting review for a possible total of 484,781 bales.
World values as measured by the Cotlook A Index dropped 55 points Wednesday morning to 91.65 cents. The index premium widened 43 points to 8.30 cents to TuesdayΆs May futures settlement and 15 points to 6.23 cents to the July close.
