Source: CAI

November 20 2014 (Source: Agfax.com)

December fell to a new five-year low and a contract low close. U.S. export bookings reached 65% of the USDA forecast, while shipments lagged at 14%. Concerns voiced about disruptions at West Coast ports. Cotton futures finished slightly lower in most-active March and on a new contract low close in spot December Thursday, unable to hold onto earlier gains.

March settled down 24 points at 58.86 cents, near the low of its 114-point range from up 78 points at 59.88 to down 36 points at 58.74 cents. It closed within 11 points of last Thursday’s contract low settlement and 29 points from the intraday contract low.

December settled down 57 points to 58.54 cents, in the lower third of its 214-point range from 59.98 — matching Wednesday’s high — to a new five-year low spot price at 57.84 cents. Its open interest has fallen sharply this week ahead of first notice day on Friday.

Volume slowed to an estimated 21,200 lots from 22,536 lots the previous session when spreads accounted for 8,952 lots or 40%, EFP 724 lots and EFS 13 lots. Options volume totaled 2,292 calls and 3,075 puts. Net U.S. all-cotton export sales of 182,800 running bales, up from 171,300 bales the previous week, lifted 2014-15 commitments to 6.322 million RB, up 206,000 bales or about 4% from year-ago bookings.

Commitments were about 65% of the USDA’s export projection, compared with 60% of final shipments at the corresponding point last season. Sales averaging roughly 91,300 RB bales a week would match the export forecast.

All-cotton shipments fell to a marketing year low of 66,600 bales, down from 90,400 bales, with upland exports of 62,600 bales down 22 percent from the four-week average. Cumulative shipments trailed exports a year ago by 705,000 RB or by 35%. Shipments reached about 14% of the USDA forecast, behind the year-ago pace of 20% of final 2013-14 exports. To achieve the estimate, shipments need to average around 226,300 RB a week.

A number of problems at West Coast ports — congestion, slowdowns and terminal closures — have contributed to the lagging export pace. Big volumes of cotton exports move through West Coast ports on the way to consuming markets in Asia. The International Longshore and Warehouse Union and the Pacific Maritime Association have been involved in protracted labor contract talks that have been blamed for disruptions.

The National Cotton Council, American Cotton Shippers Association, AMCOT representing cotton marketing co-ops, the Texas Cotton Association and the American Farm Bureau Federation are among U.S. agriculture and forest product groups that have urged prompt action to restore the ports to full operation while the ILWU and PMA continue negotiations. Concerns have been voiced that foreign customers for U.S. cotton and other goods may switch their business elsewhere if port delays continue.

Futures open interest fell 4,597 lots Wednesday to 172,510, with December’s down 3,748 lots to 3,585 and March’s down 1,171 lots to 125,128. Cert stocks grew 304 bales to 24,049. Awaiting review were 1,577 bales. World values as measured by the Cotlook A Index fell 70 points Thursday morning to 66.10 cents, widening the premium to Wednesday’s December futures settlement by six points to 7 cents. (Source: Agfax.com)