Source: Agfax.com

November 11 2014

Production prospects increased 50,000 bales from a month ago to 3.745 million on the Texas High Plains, up 53% from last season’s output. U.S. upland classing climbed to 5.159 million running bales. Cotton futures closed in the green Tuesday after posting the lows in shallow overnight dips following the prior day’s massive reversal down.

Spot December gained 87 points to settle at 63.30 cents, just below the midpoint of its 220-point range from down 13 points at 62.30 to up 207 points at 64.50 cents. It traded within the prior day’s wide range. March closed up 21 points to 61.53 cents, in the lower half of its 147-point range from down 29 points at 61.03 to up 118 points at 62.50 cents, while December 2015 edged up 12 points to 65.93 cents. March rallied after slipping four ticks below Monday’s low to within 138 points of its contract low.

Volume was estimated at a still hefty 49,988 lots, though down from 77,832 lots — the fifth largest on record — the previous session when spreads accounted for 43,023 lots or 55%, EFS 7,874 lots and EFP 14 lots. Options volume totaled 741 calls and 965 puts.

Production prospects increased 50,000 bales from a month ago to 3.745 million on Texas High Plains, according to USDA’s latest estimates, up 53% from last season’s 2.446 million bales and more than the cotton output in any other state.

The High Plains is projected to account for 59% of the Texas crop and 24% of the U.S. upland production. Prospects in the adjoining Rolling Plains east of the Caprock rose by 45,000 bales to 835,000 to raise the combined West Texas Plains production to 4.58 million bales, up 1.312 million from last season.

Harvesting resumed in some areas over the weekend and was expected to restart in others early this week after widespread rains of mostly about 1.7 to 3 inches stalled field operations early last week. Ginning slowed when the rains disrupted transportation of modules from soggy fields.

Approximately 15% of the Lubbock County crop had been harvested, reports indicated, with smaller amounts gathered in counties to the north. Many dryland growers south of Lubbock had waited on a freeze to prepare plants for stripper harvesting.

Additional hard freezes are expected the next three nights after overnight temperatures ranged from the high teens in northern cotton areas to 25 degrees at Lubbock and 27 degrees at Lamesa on the south. Lows at Lubbock are forecast at a low of 17 degrees on Wednesday. Partly sunny to mostly sunny skies now are expected into early next week.

U.S. upland classing quickened to 1.259 million running bales during the week ended Thursday to boost the total for the season to 5.159 million, up from 3.587 million RB a year ago. About 34% of the November upland crop forecast has been classed. Cotton tenderable on futures contracts totaled 72% for the week and 73.2% for the season.

Classing of 53,299 bales of Pima brought the season’s total for the extra-long staple cotton to 136,366 bales and the all-cotton count to 5.295 million, compared with 3.755 million a year ago. Futures open interest fell 3,016 lots Monday to 182,766, with December’s down 10,999 lots to 54,224 and March’s up 6,450 lots to 93,140. Decertification of 616 bales dropped stocks in deliverable position to 16,596. World values as measured by the Cotlook A Index fell 120 points Tuesday morning to 68.35 cents. Premiums to Monday’s futures settlements widened by 33 points to 5.92 cents over December and by nine points to 7.03 cents over March. (Source: Agfax.com)