DTN Cotton Close: Finishes Mixed as Old-Crop Slips

    ©Debra L Ferguson Stock Images

    Details awaited on China sales. U.S. export commitments stand at 89% of USDA’s 2016-17 estimate and 63% above cumulative sales a year ago. Commitments for 2017-18 reported nearly 8% of the export forecast.

    Cotton futures finished mixed Monday, down in traded old-crop deliveries and up modestly in contracts from December forward.

    Most-active May settled down 45 points to 76.12 cents, trading within a 111-point range from up 57 points at 77.14 cents to down 54 points at 76.03 cents. It pushed to within five ticks of the prior-session high, slipped to just below Friday’s low, and closed nine points off the low.

    Maturing March was untraded. July dipped 23 points to settle at 77.27 cents and December gained 17 points to finish at 74.15 cents.

    Traders awaited details of the resumption of China’s auctions from its huge stockpiles on March 6. The sales are scheduled to continue through Aug. 31.

    Volume was estimated at 19,176 lots, down slightly from 19,829 lots the previous session when spreads accounted for 7,514 lots or 38%, EFS 500 lots and EFP 36 lots. Options volume increased to 5,037 lots — 1,602 calls and 3,435 puts — from 4,135 lots.

    Another surprisingly strong U.S. export sales report on Friday offered follow-through support on the early old-crop gains amid conjecture about an increase in USDA’s 2016-17 export forecast in the March supply-demand estimates.

    Net U.S. all-cotton export sales for shipment this season and next rose to a whopping 509,100 running bales during the week ended Feb. 16 from the prior week’s 358,200 RB.

    All-cotton sales for shipment this season of 380,700 RB, up from 234,900 RB the previous week, brought 2016-17 commitments — outstanding sales of 4.623 million RB plus shipments — to 11.019 million RB.

    Commitments widened the lead over cumulative sales a year ago by 259,000 RB to 4.248 million RB or 63% and reached 89% of the USDA export projection. A year ago, commitments were 76% of final shipments.

    All-cotton shipments remained strong at 355,600 RB, though down from 363,300 RB the week before, and brought the total for the season to 6.251 million RB, widening the lead over year-ago exports by 175,000 RB to 2.609 million RB or 72%.

    Shipments reached 51% of the USDA estimate, compared with 41% of final 2015-16 exports at the corresponding point last season. To reach the estimate, shipments now need to average roughly 263,900 RB a week for the 23 weeks remaining in the marketing year, while sales averaging around 56,200 RB weekly would match the export projection.

    Upland net sales for shipment in 2017-18 increased to a new high for the season of 128,400 RB from 123,300 the prior week. This raised new-crop export commitments to 999,400 RB, lifting 2017-18 commitments to 80,100 RB ahead of a year ago from a lag a week earlier of 29,700 RB.

    Commitments for next season were nearly 8% of the USDA export forecast issued at last week’s Agricultural Outlook Forum, while year-ago forward bookings amounted to about 7% of the current 2016-17 estimate.

    Futures open interest expanded 1,372 lots Friday to 262,765, with March’s down 35 lots to 131, May’s up 11 lots to 161,788, July’s up 254 lots to 49,276 and December’s up 1,068 lots to 44,909. Certified stocks grew 1,719 bales to 325,397.

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