By Duane Howell DTN Cotton Correspondent
May 24, 2018
U.S. export commitments for 2017-18 stand at 112% of the USDA estimate and forward bookings at 29% of the 2018-19 forecast.
Shipments slowed but remained ahead of the pace needed to make the estimate. Cotton futures shrugged off a crop year low in U.S. weekly export sales Thursday, with July finishing on a moderate gain and December pushing to a new contract high and contract high close.
July settled up 50 points to 87.46 cents, in the upper third of its 121-point range from down 32 points at 86.64 cents to up 89 points at 87.85 cents. December gained 150 points to settle at 85.55 cents, in the upper quarter of its 199-point range from 83.75 cents to 85.74 cents.
July has held two straight sessions around the low of Tuesday’s bearish reversal from a new contract high to a triple-digit closing loss, while December has posted higher lows seven sessions in a row.
Volume quickened to an estimated 47,100 lots from 36,487 lots the prior session when spreads accounted for 16,465 lots or 45%, EFS 914 lots and EFP 78 lots. Options volume increased to 17,946 lots (8,677 calls and 9,269 puts) from 12,114 lots (7,735 calls and 4,379 puts).
Net all-cotton export sales for shipment this season this season fell to a marketing year low of 51,600 running bales during the week ended May 17, but they still nudged the lead over year-ago commitments out 30,000 RB to 2.553 million RB to maintain a gap of 18%.
Commitments — outstanding sales of 5.319 million RB plus shipments — of 16.833 million RB were 112% of the USDA export estimate, compared with 99% of final 2016-17 shipments a year ago. Cumulative sales and shipments have continued to support expectations that USDA likely will be compelled to raise its 2017-18 export projection in its monthly supply-demand estimates on June 12, resulting in lower ending and beginning stocks.
Sales for shipment next season of 152,200 RB, down from 229,300 the prior week, boosted 2018-19 commitments to 4.294 million, 1.381 million RB or 47% ahead of forward bookings a year ago. New-crop commitments are 29% of the USDA export forecast, up from forward sales last year at 19% of the current 2017-18 estimate.
All-cotton shipments of 421,000 RB, down from 434,400 RB the week before, raised the total for the season to 11.514 million RB, up 93,000 RB from a year ago and 76% of the USDA estimate. Shipments averaging 329,100 RB a week for the remainder of the season would achieve the estimate.
Meanwhile, hot, mostly dry, conditions forecast for the droughty Texas Plains offered new-crop support. High temperatures are forecast at 97 degrees at Lubbock on Friday, rising to 101 degrees Saturday and remaining around the century mark into next week. Slight chances for showers and thunderstorms are seen for Thursday and again Sunday and Monday.
Certified stocks grew 367 bales to 77,592 on Wednesday, according to the daily ICE report on cotton in deliverable position.
Open interest expanded 1,507 lots to 298,647, with July’s down 2,755 lots to 124,320 and December’s up 4,137 lots to 133,114. (Source: Agfax.com)