Market still finished ahead for the week. Traders refocused on big U.S. crop. The USDA classing office at Corpus Christi closed Thursday ahead of Hurricane Harvey. Classing totaled 458,472 running bales.
Cotton futures tumbled to heavy losses Friday, giving up some of the gains accumulated over six consecutive sessions of higher closes, but still finished ahead for the week.
December lost 168 points to settle at 68.15 cents, in the lower third of its 249-point range from up 17 points at 70 cents to down 232 points at 67.51 cents. It reversed off an 11-session high touched in overnight trading to close below the prior-day low.
March shed 129 points to close at 67.93 cents, trading within a 129-point range from 69.35 to 67.20 cents. For the week, December and March both gained 87 points. October settled up 156 points at 68.61 cents, up 82 points for the week.
Volume increased to an estimated 29,082 lots from 17,341 lots the previous session when spreads accounted for 4,839 lots or 28%. Options volume rose to 14,388 lots (7,814 calls and 6,574 puts) from 6,089 lots (4,185 calls and 1,904 puts).
Traders appeared to refocus on prospects for a big U.S. crop and buildup in ending stocks in the face of Hurricane Harvey bearing down on the Texas coast.
The approach of Harvey prompted the closure at 12:30 p.m. on Thursday of the USDA cotton classing office at Corpus Christi. The facility may resume operations as early as Sunday.
Classing of 125,332 running bales during the week ended Thursday brought the total for the season to 458,472 RB, up from 315,998 RB graded a year ago. Tenderable cotton slipped to 88.7% for the week and 91.2% for the season.
While a relatively small amount of South Texas cotton is estimated still on the stalk, industry people also are concerned about potential damage to cotton infrastructure and farm structures.
Large inland areas, including the Delta where cotton is opening, also could get copious amounts of rain. Lint quality as well as yields could be damaged. But thereΆs a tendency for overreaction to early fears of hurricane cotton crop damage, analysts said.
Open cotton as of Sunday totaled 30% in Louisiana and 17% in Mississippi. Upland production in the five-state Delta region is estimated at 4 million bales, largest since 2012 and 20% of the U.S. crop.
The U.S. 2017 upland crop is projected at nearly 19.8 million bales, up about 3.2 million bales from 2016. During the past 20 years, the August upland production forecast was above the final output 12 times and below it eight times.
Past differences between the August forecast and final production indicate that chances are two out of three for the 2017 crop to range between 18.3 million and 21.2 million bales, according to USDA.
If achieved, the U.S. all-cotton production estimate of 20.5 million bales would be the largest in 11 years. Upland yields in the Delta are forecast to top the five-year average of 1,067 pounds and reach 1,077 pounds per harvested acre.
Futures open interest dropped 973 lots to 226,412 on Thursday, with DecemberΆs down 1,072 lots to 146,829 and MarchΆs down 189 lots to 55,540. Certified stocks declined 391 bales to 10,888, smallest since March 30, 2015 when the stocks were 10,292 bales.
