U.S. crop estimate raised 270,000 bales in mostly unexpected timing, exports boosted 500,000 bales and ending stocks cut 300,000 bales. World ending stocks increased 580,000 bales to 90.48 million.
Cotton futures settled mixed Thursday, down slightly in old-crop deliveries and up marginally in active new-crop contracts following USDAΆs monthly supply-demand report.
May closed down 27 points to 77.82 cents, around the middle of its 148-point range from down 99 points at 77.10 to up 49 points at 78.58 cents. It quickly fell to the four-session low on the USDA report, reached the session high above WednesdayΆs peak an hour later and chopped back and forth into the close.
March expired at 76.63 cents, 119 points under May. July dipped 14 points to settle at 78.89 cents and December eked up four points to close at 75.49 cents. December posted a new contract high at 75.54, just above the prior high of 75.50 on Monday and again on Tuesday.
Commodities were broadly lower. May corn closed down 1.4%, May soybeans 1%, May Chicago wheat 0.7% and May Kansas City wheat also 0.7%.
Cotton volume increased to an electronically estimated 33,400 lots from 22,249 lots the previous session when spreads accounted for 10,580 lots or 48%, EFP 93 lots and EFS 44 lots.
In mostly unexpected timing, USDA boosted the U.S. crop estimate by 270,000 bales from the previous forecast to 17.23 million, based on end-of-season ginning data.
With classing figures already having topped the production forecast and ginning continuing in parts of the Southwest, an increased estimate had been generally expected in later USDA reports. Previously, USDA hadnΆt tweaked the January annual crop estimate until April.
Final figures on 2016-crop acres, yield and production will be reported by USDAΆs National Agricultural Statistics Service on May 10. This now is expected to be the next NASS production estimate.
Exports are projected up 500,000 bales from a month ago to 13.2 million based on recent robust sales and shipments. This would be nearly 37% of world cotton trade, a seven-year high. Domestic mill use remained at 3.2 million bales.
Ending stocks declined 300,000 bales to 4.5 million, 27.3% of the projected market offtake, down from stocks-to-use ratios of 30% foreseen last month and 30.2% last season.
The USDA reduced its projected range for the marketing year average price received by producers by a cent on the upper end, now 67 to 70 cents per pound. The midpoint of 68.50 cents is down from 69 cents foreseen last month but up from 61.20 cents last season.
U.S. all-cotton ginning to March 1 totaled 16.59 million running bales, up 32.5% from 12.517 million a year ago. Not included were 188,500 RB which ginners estimated would be processed after the survey.
Globally, production rose by a slight 300,000 bales to 105.72 million on the upward adjustment in the U.S. crop and consumption was virtually unchanged, down 90,000 bales to 112.43 million. Mill use rose for Indonesia and Vietnam and declined for Turkey and other countries.
World beginning stocks rose by a marginal 260,000 bales to 97.09 million on higher estimated 2015-16 production in Australia. World trade edged slightly higher to nearly 36 million bales.
Global ending stocks increased 580,000 bales to 90.48 million, down 6.61 million bales from the beginning inventory and 80.5% of consumption. Ending stocks for China edged up 50,000 bales to 41.58 million, 54% of the world total. World ending stocks minus China rose 53,000 bales on the month to 41.58 million, up 2.69 million bales from beginning stocks.
Futures open interest edged up 146 lots Wednesday to 273,503, with MarchΆs down 17 lots to four, MayΆs down 574 lots to 160,839, JulyΆs down 1,073 lots to 49,938 and DecemberΆs up 1,699 lots to 55,055. Cert stocks declined 757 bales to 324,840. There were 20 newly certified bales and 777 bales decertified.
