Survey projected 7% increase in U.S. plantings. Additional decline in world stocks forecast for 2016-17 by ICAC. Weekly export sales eyed.
Cotton futures retreated from an eight-session high to finish lower in spot March Wednesday, touching the low in the late going, while December settled higher.
- March settled down 36 points to 61.94 cents, closing in the lower quarter of its 82-point range from up 29 points at 62.59 to down 53 points at 61.77 cents. It hit the high in early morning, slipped to 61.92, bounced to 62.38 and retreated steadily going into the close.
- May dipped 34 points to close at 62.41 cents, July eased off 11 points to 62.77 cents and December gained 21 points to 62.62 cents.
- Volume was estimated at 44,171 lots, down from 49,288 lots the previous session when spreads accounted for 25,015 lots or 51%, EFS 2,043 lots, block trades 2,000 lots and EFP 42 lots. Options volume totaled 3,336 calls and 1,584 puts.
Looking ahead, U.S. cotton producers planned a 7% increase in plantings this year, according to a survey by Delta Farm Press and Farm Futures magazine.
The survey, conducted by email from Dec. 7 to Jan. 4, pegged all-cotton plantings at 9.19 million acres, compared with 8.58 million last year and 11.04 million acres in 2014.
Producers indicated they want to return some of the acreage back to cotton after bad weather at planting and low prices slashed acreage by 22% last year to the smallest since 1983.
A recent survey by Blomberg News showed intentions of 9.45 million acres. The National Cotton Council will release results of its early planting intentions survey on Saturday at its annual meeting in Dallas and USDA’s prospective plantings is scheduled for release on March 31.
In its first world 2016-17 supply-demand estimates, the International Cotton Advisory Committee this week projected an additional drop in global ending stocks, though at a slower rate.
Converted to statistical 480-pound bales from metric tons, the ICACΆs estimates showed world ending stocks declining 5% to 89.5 million following a 7% decline this season to 94.2 million.
World production is projected to increase 2.8% to 106.1 million bales, with consumption up a mere 0.2% 110.83 million bales. Global stocks would amount to 81% of consumption.
Meanwhile, some tradersΆ estimates have ranged from 125,000 to 225,000 running bales in U.S. upland export sales for the week ended Jan. 28, compared with 128,300 RB the previous week. The USDA weekly export sales-shipments report is set for release at 7:30 a.m. CST on Thursday.
Sales have averaged 144,173 RB the last four weeks and shipments have averaged 133,541 RB. The weekly shipments pace still needs to improve to reach the USDA forecast.
Futures settlements during the reporting week ranged from 62.45 cents to 60.86 cents, basis March, and averaged 61.54 cents.
Open interest grew 2,126 lots Tuesday to 197,632, with MarchΆs down 1,241 lots to 102,660 and MayΆs up 1,994 lots to 49,234. This followed 2,851 lots on MondayΆs rally. Cert stocks declined an additional 1,170 bales to 26,614.
