DTN Cotton Close: Climbs to New Rally High

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    Uncertainty about Harvey’s eventual crop impact underpinned the advance. Delta crop in storm’s path estimated at 4 million bales, largest since 2012. Certified planted acres in Texas topped USDA estimate.

    Cotton futures extended gains to a new rally high and a new high close for the move Wednesday amid ongoing weather concerns.

    December gained 87 points to close at 70.85 cents, just off the high of its 110-point range from down 14 points at 69.84 cents to up 96 points at 70.94 cents. It printed the highest intraday price since Aug. 10 when it posted 71.19 ahead of the USDA crop and supply-demand estimates later in the day and finished on its highest close since Aug. 9.

    December has closed higher nine of the last 10 sessions for a gain of 409 points. March added 60 points to close at 69.98 cents, near the high of its 78-point range from 69.29 to 70.07 cents. October gained the most, settling up 91 points to 71.47 cents.

    Volume rose to an estimated 26,792 lots from 24,760 lots the prior session when spreads accounted for 8,470 lots or 34% and EFS 540 lots. Options volume slipped to 4,682 lots (2,317 calls and 2,365 puts) from 5,266 lots (3,504 calls and 1,762 puts).

    Uncertainty over the eventual overall crop impact from the movement of Tropical Storm Harvey and its remnants through high-yielding Delta cotton areas helped to underpin the futures advance.

    Storm losses from winds and flooding in what had been a bumper crop of outstanding quality in South Texas have been estimated thus far from mostly 300,000 to 500,000 bales.

    Heavy boll loads have been reported in the South Delta, though boll rot and boll lock were apparent in fields where excessive rains had fallen the past few weeks. Most fields in the North Delta have rapidly neared the point where no additional inputs will be needed until defoliation.

    The Delta crop is forecast at 4 million bales, largest since 2012 and 20% of U.S. production. The planted area increased for the second straight season and the yield is projected to surpass the five-year average of 1,067 pounds and reach 1,077 pounds per harvested acre.

    In Texas, certified acreage figures have indicated producers planted 6.807 million acres of upland cotton, up from the 6.6 million acres — unchanged from the June estimate — reported in the August crop forecast.

    Failed certified acres totaled 820,175 at the time. This doesn’t include acreage destroyed later by the storms in South Texas. The USDA estimated acres for harvest at 5.7 million, a projected abandonment of 900,000 acres or 13.6%.

    Certified acres totaled 4.324 million on the High Plains and failed acres were 773,187, indicating a standing area of 3.55 million acres. The High Plains had all but about 47,000 of the failed Texas acres.

    In its Aug. 10 report, USDA estimated plantings on the High Plains at 4.055 million acres, harvested acres at 3.425 million, abandonment at 630,000 acres or 15.5% and production at 5.23 million bales.

    Beneficial rains have fallen this month in much of the High Plains, enhancing the potential for the crop to exceed USDA’s initial forecast. However, good finishing weather — sunshine and warmth — and no early frost will be required to achieve the potential, and below-normal temperatures lately aren’t what the crop needs.

    Futures open interest edged up 26 lots to 224,967 on Tuesday, with December’s down 625 lots to 144,047 and March’s up 476 lots to 56,634. Certified stocks were unchanged at 9,832 bales, lowest since March 2015.

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