Unfixed on-call mill position outweighed that of producers in December by a ratio of 2.1:1. U.S. all-cotton outstanding loans fell to 821,521 bales.
Cotton futures surged to strong closing gains for the second consecutive session amid an improved technical picture Friday.
Benchmark December advanced 133 points to settle at 86.18 cents, its highest settlement since July 10 and near the high of its 171-point trading range from down 17 points at 84.68 to up 154 points at 86.39 cents. March gained 114 points to close at 84.52 cents.
Concerns about tight supplies before new-crop cotton begins to move in volume may have contributed to the advance, analysts said. Another sizable decertification of cotton in deliverable position may have played a role.
For the week, the market gained 139 points in October, 110 points in December and 61 points in March.
Volume slowed to an estimated 11,800 lots from 14,870 lots the previous session when spreads totaled 1,592 lots or 11%. Options volume totaled 1,208 calls and 1,877 puts.
Mills increased their on-call position in December by 616 lots to 30,371 last week and producers shaved theirs by 37 lots to 14,494, according to the latest Commodity Futures Trading Commission report.
The net call difference thus widened 653 lots to 15,877, which was 11.33% of the open interest, against 10.96% a week earlier. The unfixed mill position outweighed that of producers by a ratio of 2.1:1.
In March, unfixed holdings rose by 180 lots to 14,074 on the mill side and by 1,128 lots to 1,559 on the producer side, narrowing the net call difference by 948 lots to 12,515. This reflected a ratio of unfixed mill-producer holdings of 9.03:1.
Separately, repayments on 74,181 bales reduced U.S. outstanding loans of all cotton to 821,521 bales during the week ended Tuesday, USDA reported. Upland loans outstanding fell 69,975 bales to 728,868.
Loans were outstanding on 75,276 bales of Form A issued to individual growers and 746,245 bales of Form G issued to marketing cooperatives or loan servicing agents.
Loans outstanding in the two largest cotton producing states fell 12,057 bales to 81,931 in Texas and 14,739 bales to 130,541 in Georgia. The state totals included 719 bales of Form A and 81,212 bales of Form G in Texas and 5,591 and 124,950 bales, respectively, in Georgia.
Futures open interest expanded 1,863 lots to 161,317 on ThursdayΆs strong rally, with DecemberΆs up 1,599 lots to 140,413 and MarchΆs up 235 lots to 14,365.
Certificated stocks fell 49,210 bales to 418,922. There were 93 newly certified bales, 49,303 bales decertified and 1,100 bales awaiting review.
World values as measured by the Cotlook A Index gained 100 points Friday morning to 92.15 cents. The premium to ThursdayΆs December futures settlement narrowed 18 points to 7.30 cents. The index was flat for the week.
