ChinaΆs cotton imports fell in January to less than half those of the previous month, according to preliminary figures, but have maintained a pace halfway through the marketing year above the USDA forecast.
Cotton futures tumbled to sharp closing losses in old-crop contracts Wednesday after again failing the previous day to take out resistance at last weekΆs high for the move in most-active May.
May lost 157 points to close at 87.91 cents, a six-session low finish and just off the low of its 174-point range for the day from 89.55 to 87.81 cents. It had posted a new high close for the move on Tuesday but not a new follow-through seasonal high.
The March contract settled down 94 points to 86.97 cents, trading from 88.05 to 86.81 cents, while July fell 117 points to 87.83 cents and December dipped 27 points to 77.79 cents.
Volume based on electronic figures increased to an estimated 30,900 lots from a cleared 27,546 lots the previous session when spreads accounted for 14,955 lots or 54%, EFS 2,540 lots and EFP 265 lots.
ChinaΆs cotton imports totaled 292,500 metric tons or 1.34 million 480-pound bales in January, less than half the volume of the previous month and less than two-thirds that of January last year, according to preliminary figures released over the weekend.
However, imports during the first six months of the marketing year totaled 1,692,500 tons or 7.77 million bales, down 26.7% from 2,133,796 tons or 9.8 million bales during the corresponding period last season.
The USDA estimate for the full marketing year from Aug. 1 is for imports to decline 46% to 11 million bales from 20.33 million in 2012-13.
In 2011-12 and 2012-13, less than half the cotton imported had been received in the first six months, Sharon Johnson, senior cotton specialist and introducing broker for KCG Futures in Roswell, Ga., pointed out in a report.
More than 70% of the USDA projection for 2013-14 already has been received, compared with 48% at the corresponding point last season and 41% halfway through 2011-12.
Chinese imports from August through January have averaged roughly 1.3 million bales per month, Johnson noted. If the USDA estimate proves correct, imports the remainder of the season would average around 538,000 bales a month.
If the current pace were maintained, final imports would exceed 15 million bales, Johnson said, adding that USDA wonΆt raise its estimate that much. However, she expects eventual imports to reach 12 million to 13 million bales.
Futures open interest fell 2,180 lots Tuesday to 171,549, with MarchΆs down 7,055 1ots to a manageable 12,792 ahead of first notice day on Monday and MayΆs up 3,865 lots to 102,746.
Certificated stocks edged up a single bale to 250,606. There were 181 newly certified bales, 180 bales decertified and 1,345 bales awaiting review.
World values as measured by the Cotlook A Index gained 40 points Wednesday morning to 95.75 cents. The index premium to TuesdayΆs May futures settlement narrowed four points to 6.27 cents.
