March settled even with Monday’s close. With mills persisting in hand-to-mouth buying, traders looked ahead to the U.S. weekly export sales-shipments report.
U.S. cotton futures drifted to a marginally higher finish in a holiday atmosphere on this next-to-last session of the week and year.
- Spot March settled up 10 points to 63.97 cents, regaining precisely what it lost on Tuesday to finish right where it closed on Monday. It finished in the middle of its tiny 36-point trading range from down nine points at 63.78 cents to up 27 points at 64.14 cents. May closed up nine points to 64.71 cents, while December 2016 edged up 10 points to settle at 65.10 cents.
- Volume dwindled to an estimated 8,059 lots from 13,002 lots the previous session when spreads accounted for 2,964 lots or 23%, EFS 1,986 lots and EFP 55 lots. Options volume totaled 1,154 lots — 439 calls and 715 puts.
With most mills reported persisting in hand-to-mouth buying, traders looked ahead to U.S. weekly export sales figures to be released by USDA at 7:30 a.m. CST on Thursday. The report will be for the week ended Dec. 24.
Some analysts expect a softening — affected partly by the approaching holidays — from the net upland sales of 118,241 running bales registered for the prior week. Upland sales the last four-weeks have averaged 145,905 RB.
Upland shipments quickened to a seven-week high of 127,555 RB for the last reporting week to raise the four-week average to 102,948 RB.
The USDA cut its December export forecast by 200,000 bales from a month ago to 10 million statistical 480-pound bales, nearly 1.3 million bales below last seasonΆs shipments, owing to lower available supplies and lagging sales.
With the lower volume, especially to China, the U.S. share of global cotton trade is projected at 28%, compared with 32% last season and 26% in 2013-14.
Mexico is the top U.S. export customer thus far this season with purchases of 920,000 SB or 18% of the commitments, followed by Turkey with 818,888 SB or 16% and Vietnam with 754,000 SB or 14%.
China, the largest foreign buyer last season, has fallen to seventh this season on purchases of 272,000 SB or 5%. A year ago, China had booked 1.572 million SB or 21%.
The timing of allocations of ChinaΆs 2016 tariff-rate import quota of 894,000 metric tons (4.106 million bales) and of any fresh release from ChinaΆs huge strategic stockpile have drawn considerable conjecture.
Futures open interest increased 239 lots Tuesday to 183,390, with MarchΆs down 666 lots to 123,590 and MayΆs up 693 lots to 31,417. Cert stocks grew 139 bales to 64,340.
