A crop year high in U.S. weekly export sales lifted commitments to 9.434 million RB, up 2.648 million RB or 39% from a year ago. Shipments lagged at 2.047 million RB, down 411,000 RB from last year.
Cotton futures settled higher Thursday, led by December on its first back-to-back closing gains since Oct. 30 as it inverted over March with four trading sessions now left until first notice day.
December closed up 40 points to 69.21 cents, above the prior-session high on its highest settlement since Oct. 25. It settled just above the midpoint of the day’s 71-point range — set following release of export-sales-shipments data — from up 69 points at 69.50 to down two points at 68.79 cents.
March settled up 34 points to 69.18 cents, trading within a 70-point range from up 65 points at 69.49 to down five points at 68.79 cents. It finished below December — by three points — for the first time in 11 sessions. The other contracts closed up 16 to 49 points.
The market had partly discounted robust U.S. weekly export sales reported by USDA, but sales came in stronger than generally expected. Slow weekly shipments may have helped to keep the rally in check.
Volume increased to an estimated 41,881 lots from 38,655 lots the previous session when spreads accounted for 27,594 lots or 71%, EFS 1,100 lots and EFP 532 lots. Options volume rose to 3,657 lots (2,537 calls and 1,120 puts) from 806 lots (512 calls and 294 puts).
Net all-cotton export sales for shipment this season jumped to a marketing year high of 524,800 running bales during the week ended last Thursday, up 240% from the previous week’s 218,700 RB.
Upland sales of 506,700 RB topped the previous crop year high of 289,100 RB for the week ended Oct. 19 and were the largest since Jan. 15, 2015 when sales were 546,200 RB. Prices during the reporting week traded within a 147-point range from 68.01 to 69.48 cents, basis December futures.
Commitments for 2017-18 rose to 9.434 million RB, widening the lead over cumulative sales a year ago by 304,000 RB to 2.648 million RB or 39%. Sales were 67% of the USDA export estimate, compared with 47% of final 2016-17 exports a year ago.
Sales for shipment next season fell to only 200 RB from 31,200 RB, with 2018-19 commitments of 917,000 RB still holding a big lead over forward bookings of 450,600 RB last year.
All-cotton shipments remained far behind the pace needed to achieve the export estimate, falling to 100,600 RB from 128,300 RB. Approximately 31% of the projected production had been classed as of Nov. 9.
Shipments for the season of 2.057 million RB were down 411,000 RB from a year ago and were 15% of the 2017-18 projection, against 17% of final exports at the corresponding point last season.
To achieve the USDA projection, shipments need to average roughly 324,600 RB a week, while weekly sales averaging approximately 125,200 RB would match the export forecast.
Futures open interest fell 1,886 lots to 224,750 on Wednesday, with December’s down 9,966 lots to 24,880 and March’s up 6,461 lots to 141,383. Decertification of 158 bales trimmed cert stocks to 47,970 bales.