U.S. ginning report indicated confirmation of a smaller 2013 crop and lower, already tight ending stocks. Ginning data came in 320,000 bales below the last crop estimate. Talk circulated of China import quota.
Cotton futures surged from an early dip to the daily limit and a new two-year-plus high Tuesday, bolstered partly by confirmation of a smaller crop indicated by U.S. end-of-season ginning figures.
Spot May closed up 348 points to 94.11 cents, in the upper reaches of its 473-point range from down 73 points at 89.90 to up 400 points at 94.63 cents. It hit the highest intraday price on a continuous chart since March 2012 and settled at the highest close since early February 2012.
July also jumped the daily limit and closed up 299 points to 83.54 cents, while December gained 101 points to settle at 80.30 cents.
Talk circulated that China soon may announce a so-called processing import quota linked to the announcement Monday of a reduced floor price on sales of reserve stocks.
Volume slipped to an estimated 31,600 lots from 35,915 lots the previous session when spreads accounted for 12,401 lots or 35%, block trades 170 lots and EFP 33 lots. Options volume totaled 3,874 calls and 3,793 puts.
U.S. gins processed 12.867 million 480-pound statistical bales of 2013-crop cotton, down 320,000 bales from USDAΆs last crop estimate reported in the annual production summary in January.
Expectations had ranged predominantly for an indicated crop cut of 200,000 to 300,000 bales. The ginning figures are expected to be incorporated into the April 9 supply-demand report and result in smaller, already tight ending stocks in the worldΆs largest cotton exporter.
The final report on the 2013 crop will be issued May 9 and will contain revisions in production, acreage and yields. An annual ginning summary also will be issued at that time.
Included in TuesdayΆs ginning data from USDAΆs National Agricultural Statistics Service were 20,150 bales which ginners estimated would be processed after the March survey. There were 609 active cotton gins for the 2013 crop year, down from 671 the previous season.
Upland ginning totaled 12.234 million statistical bales, down from the January estimate of 12.551 million, and Pima ginning reached 632,850 bales, down from 635,700 bales.
In running bales, the all-cotton total was 12.522 million, including 11.912 million of upland and 609,900 of Pima. Bale weights averaged 493.2 pounds, against 492.9 pounds in 2012 and 492.8 pounds in 2011.
Ginning of Texas upland cotton of 4.19 million 480-pound bales came in below the crop estimate of 4.3 million bales. Based on average bale weights statewide of 492 pounds, running bales ginned on the High Plains of 2,532,350 translated into a crop of 2.596 million statistical bales, down 74,000 bales from the crop forecast.
The latest USDA crop estimate combined with beginning stocks of 3.9 million bales had yielded a projected 2013-14 supply of 17.1 million bales, 17% below a year ago and the lowest in nearly three decades.
And with demand for U.S. cotton exceeding production, ending stocks earlier this month had been forecast to fall to 2.8 million bales, 28% below last seasonΆs carryout and the smallest since 2010-11.
Futures open interest fell 3,268 lots on MondayΆs steep losses to 183,155, with MayΆs down 103,395, JulyΆs up 132 lots to 37,572 and DecemberΆs up 533 lots to 38,816. Certificated stocks were unchanged at 255,044 bales.
World values as measured by the Cotlook A Index fell 280 points Tuesday morning to 95.80 cents. The premium to MondayΆs May futures settlement narrowed 12 points to 5.17 cents.
