DTN Cotton Close: July Falls to 6 Week Low

    December snapped five-week losing streak. U.S. commitments reached 102% and shipments 84% of the 2016-17 export forecast. Mills raised their unpriced on-call position from December 2017 through July 2018 to 78,123 lots.

    Cotton futures gave back the previous day’s moderate gain plus some Friday as spot July finished on its lowest settlement since April 13.

    July closed down 94 points to 76.69 cents, near the low of its 120-point range from up 14 points at 77.77 cents to down 106 points at 76.57 cents. It dropped 40 points for the week, its third weekly loss in a row and the fifth in the last six.

    December settled down 38 points to 73.12 cents, in the lower half of its 87-point range from 73.67 to 72.80 cents. It gained 33 points for the week, snapping a string of five consecutive weekly losses.

    Volume declined to an estimated 29,500 lots from 33,646 lots the previous session when spreads accounted for 20,187 lots or 60%, EFS 65 lots and EFP 11 lots. Options volume slowed to 3,921 lots (2,500 calls and 8,434 puts) from 6,442 lots (3,621 calls and 2,821 puts).

    Net U.S. all-cotton export sales for shipment this season rose to 108,100 running bales during the week ended May 25 to boost 2016-17 commitments to 11.802 million RB, USDA’s weekly report showed.

    Upland net sales of 110,900 RB, up from a marketing year low of 16,200 RB the prior week following wild July price gyrations, were about as generally expected. There were 2,800 RB net cancellations of Pima.

    All-cotton commitments stood 5.618 million RB or 65% over cumulative sales a year ago and were slightly more than 102% of the USDA export forecast. A year ago, commitments were 99% of final shipments.

    Strong shipments of upland and Pima combined of 381,100 RB, up from 345,800 the week before, boosted all-cotton exports to 11.802 million RB, up 4.831 million RB or 69% from a year ago.

    Exports were 84% of the USDA estimate, compared with 79% of final shipments at the corresponding point last season. To achieve the forecast, shipments now need to average roughly 251,500 RB over the nine weeks remaining in the marketing year.

    Net all cotton sales for shipment next season of 169,600 RB brought the total for both crop years to 277,700 RB, up from 259,800 RB the previous week.

    Commitments for 2017-18 rose to 3.083 million RB, compared with forward sales a year ago of 1.438 million RB. New-crop bookings are 23% of the USDA export projection. A year ago, forward sales were 10% of the current 2016-17 export estimate.

    Separately, in the contracts from December 2017 through July 2018, mills added 3,024 on-call lots last week to raise their unpriced position to 78,123 lots (7.812 million bales), data reported by the Commodity Futures Trading Commission showed after the close Thursday.

    That compares with an unpriced mill position in the corresponding 2016-17 contracts a year ago of 38,018 lots. Producers added 612 lots, upping their unpriced position to 26,900 lots. The net call difference widened 2,412 lots to 51,223, which was 35.8% of the rising open interest.

    Futures open interest increased 1,877 lots Thursday to 243,466, with July’s down 3,075 lots to 88,324, December’s up 4,241 lots to 129,064 and March’s up 378 lots to 16,911.

    Certified stocks increased 21,946 bales to 443,854, a new high since July 2014. There were 9,400 bales awaiting review, including 966 at Galveston and 8,434 at Memphis.

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