U.S. cottonΆs share of TurkeyΆs import market, on the decline since the peak in 2010-11, has faced additional difficulties because of an antidumping duty.
Cotton futures rallied late in the day to just above unchanged, 208 points from the morning low, but still finished on a modest loss Tuesday.
Benchmark December closed down 26 points to 68.60 cents, in the upper quarter of its 212-point range from up 14 points at 69 cents to down 198 points at 66.88 cents. It ticked last at 68.83. A 50% retracement from the contract low of Feb. 29 to the Aug. 5 high would be 66.09.
Nearby October settled off eight points at 68.01 cents, March dipped 32 points to 69.09 cents and December 2017 lost 66 points to 68.13 cents.
Volume quickened to an estimated 40,819 lots from 29,634 lots the previous session when spreads accounted for 6,286 lots or 21% and EFP 57 lots. Options volume totaled 10,722 calls and 14,889 puts.
Cotton imports into Turkey, a major importer of the U.S. fiber crop, got a 200,000-bale increase to 4.3 million on recent strong demand reported in the World Agricultural Outlook BoardΆs 2015-16 estimates this month, while the forecast for 2016-17 remained at 3.8 million bales.
But U.S. cottonΆs share of TurkeyΆs imports, on the decline since the peak in 2010-11, has faced additional difficulties because of the antidumping case initiated against the U.S. fiber crop in October 2014.
Even during peak months of U.S. shipments in 2014-15, the U.S. share barely cracked 50%, according to USDAΆs Foreign Agricultural Service, and the annual proportion was the lowest of any recent year except 2015-16.
By December 2015, monthly imports reached low levels not seen since 2010. After the announcement of final antidumping duty rates (initial findings were announced in February and final determinations in April), the U.S. share has continued to decline.
Despite TurkeyΆs robust 2015-16 import demand, with imports through June up 500,000 bales from the prior year, imports of U.S. cotton fell more than 50,000 bales, FAS said in a world markets and trade report.
However, the U.S. share of TurkeyΆs imports began to fall as early as the 2011-12 marketing year, FAS noted, and had declined steadily for at least two years before initiation of the antidumping case.
Since 2011-12, TurkeyΆs imports of such growths as Central Asian, Brazilian and African have risen, with Central Asian and African cottons appearing especially more competitively priced than U.S. cotton.
The antidumping duty of 3% will exacerbate the price gap for the 2016-17 marketing year, FAS said, adding that this could pressure the U.S. share somewhat further.
However, other factors are likely to make U.S. exports more competitive. For example, U.S. cotton of desirable qualities wasnΆt highly available for contracting in 2015-16, FAS points out, reducing the ability of exporters to benefit from strong demand in Turkey.
In 2016-17, both the total size and quality distribution of the U.S. crop are expected to improve noticeably. Also, stocks in Africa, Brazil and Central Asia have tightened substantially over the last two years.
Those factors could enable U.S. exporters to weather the antidumping duty with little loss of business over the next marketing year.
Futures open interest fell 3,439 lots Monday to 239,989, with DecemberΆs down 3,814 lots to 174,746 and MarchΆs up 196 lots to 43,647. Certified stocks were unchanged at 86,404 bales.
