Strong U.S. weekly export sales and shipments reinforced expectations for lower ending stocks. Commitments climbed to 91% of the USDA projection and shipments to 56%.
Cotton futures surged to the highest close for May in about two years Thursday as higher-than-expected U.S. weekly export sales spurred perceptions of a need for higher prices to ration tight old-crop supplies.
Benchmark May settled up 300 points to 91.61 cents, just off the high of its 328-point range from down 16 points at 88.45 to up 312 points at 91.73 cents. It powered through buy stops to the highest May close since February 2012 and the highest finish on a continuation basis since August.
Maturing March closed up 210 points to 90 cents, July advanced 285 points to 90.71 cents and December gained 66 points to 79.55 cents.
Strong U.S. weekly export sales and shipments reinforced expectations that USDA will boost its export forecast and lower U.S. ending stocks in its supply-demand report on Monday.
The March contract will expire Friday. Only 51 lots were still open coming into ThursdayΆs session. Delivery notices have remained at only 62 lots (6,200 bales) since the fourth day of the notice period.
Volume jumped to an electronically estimated 34,700 lots from a cleared 12,760 lots — a low for the year — the previous session when spreads totaled 3,829 lots or 30% and EFP 82 lots.
Net all-cotton export sales for shipment this season jumped to 182,100 running bales during the week ended Feb. 27 from a crop year low of 42,000 RB the previous week.
This boosted 2013-14 export commitments to 9.302 million RB, about 91% of the USDA forecast. A year ago, commitments were about 86% of final 2012-13 shipments. Commitments trailed year-ago bookings by 1.616 million RB or by about 15%. The USDA projection is for exports to fall about 19%.
All-cotton shipments hit a marketing year high of 376,900 RB, up 31% from the previous week and 12% from the prior four-week average. Exports for the season climbed to 5.729 million RB, 56% of the estimate, compared with 54% of final shipments at the corresponding point last year.
Cumulative shipments were 1.105 million RB or about 16% behind year-ago exports. To achieve the USDA estimate, all-cotton shipments need to average roughly 212,200 RB a week, while net sales averaging only about 42,100 RB would match the forecast.
Net sales for next season rose to 42,800 RB from the previous weekΆs 29,000. This brought 2014-15 commitments to 819,700 RB, 147,100 RB behind forward bookings a year ago. The new-crop commitments are about 8% of USDAΆs 2014-15 export forecast reported at its outlook forum.
Futures open interest expanded 1,559 lots Wednesday to 165,827, with MayΆs up 673 lots to 102,766, JulyΆs up 291 lots to 33,231 and DecemberΆs up 565 lots to 28,224.
Certificated stocks declined 1,031 bales to 258,061. There were 1,254 newly certified bales, 2,285 bales decertified and 2,599 bales awaiting review.
The Cotlook A Index of world values dropped 60 points Thursday morning to 94.55 cents. The premium to WednesdayΆs May futures settlement widened a point to 5.94 cents.
