DTN Cotton Close: Dec. Score 9-Day High

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Volume estimated at a huge 83,268 lots. U.S. export commitments reached 56% of the USDA estimate and were 2.6 million RB ahead of year-ago sales. Crop estimates raised 405,000 bales in the Texas High and Rolling Plains.

Cotton futures settled on gains of 64 to 102 points Thursday, with spot December finishing on a nine-session high close.

December closed up 91 points to 69.20 cents, in the upper half of its 163-point range down 13 points at 68.16 to up 150 points at 69.79 cents. December options expire Friday and first notice day is Nov. 23.

March settled up 97 points to 69.83 cents, while December 2017 closed up 79 points to 69.50 cents. May and July posted the largest closing gains, up 100 points to 70.50 and 102 points to 70.95 cents, respectively.

Volume was estimated a huge 83,268 lots, up from 60,317 lots the previous session when spreads accounted for 41,734 lots or 69%, EFS 1,885 lots and EFP 255 lots. Options volume totaled 5,179 calls and 4,091 puts.

U.S. all-cotton export sales of 181,800 running bales during the week ended last Thursday for shipment this season, up from 162,600 RB the previous week, brought 2016-17 commitments to 6.566 million RB.

The lead over commitments a year ago widened 46,000 RB to 2.656 million RB and amounted to 56% of the USDA export forecast. A year ago, commitments were 45% of final 2015-16 exports.

All-cotton shipments of 151,100 RB, up from 134,600 RB the prior week, boosted the total for the season to 2.358 million RB and widened the lead over exports a year ago by 75,000 RB to 868,000. Shipments were 20% of the USDA estimate, compared with 17% of final 2015-16 exports a year ago.

To achieve the USDA forecast, shipments need to average roughly 238,000 RB during the remaining 39 weeks of the marketing year, while weekly sales averaging approximately 130,100 RB would match the projected exports.

Sales for shipment next season jumped to 15,600 RB from 6,000 RB the previous week and were the largest since the week ended Sept. 8. Bookings for 2017-18 reached 449,700 RB, still behind forward commitments a year ago of 593,200 RB.

In its monthly U.S. crop estimate this week, USDA raised its forecast for production on the Texas High Plains by 275,000 bales to 4.375 million, reflecting favorable October weather for boll maturation and harvesting.

This is up 15% from last year and accounts for 63% of the Texas production and 28% of the U.S. upland crop. Production prospects improved 170,000 bales to 3.12 million in the southern High Plains and 105,000 bales to 1.255 million in the northern district.

Crop prospects also brightened in the adjoining Rolling Plains on the east, rising 130,000 bales to 1.01 million, up from 898,100 in 2015.

The combined High Plains and Rolling Plains production forecast rose by 405,000 bales to 5.385 million, more than offsetting a 310,000-bale reduction to 4.02 million bales in the five-state Southeast region.

Statewide, upland production, including small adjustments in other Texas districts, is estimated at 6.9 million bales, up 400,000 bales from a month ago and 21% higher than in 2015.

Futures open interest expanded 2,104 lots Wednesday to 251,015, with December’s down 9,046 to 79,049 and March’s up 9,636 lots to 122,851. Cert stocks grew 4,669 bales to 47,089. There were 4,933 newly certified bales and 264 bales decertified.


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