July surged in heavy spread trading. U.S. 2016-17 export commitments reported just over 100% of the new USDA estimate and shipments at 76%. Record high 2016-17 yields achieved in four states.
Cotton futures surged higher in spot July on heavy volume and intercrop spreading in its widest trading range of the year Thursday.
July surged 269 points to settle at 79.18 cents, just off the high of its 304-point range from 76.17 cents to 79.21 cents. It rallied from a new intraday low since April 13 and settled at a seven-session high close, finishing at a 665-point premium over December.
December closed up a modest 20 points to 72.53 cents, trading within a 131-point range from 72.15 to 73.46 cents and snapping a string of four losing sessions in a row.
Volume jumped to an estimated 67,317 lots from 36,096 lots the previous session when spreads accounted for 13,577 lots or 38% and EFP 277 lots. Options volume rose to 13,198 lots (7,096 calls and 6,102 puts) from 7,030 lots (3,674 calls and 3,356 puts).
Weekly export sales and shipments were supportive. Net all-cotton sales for shipment this season of 163,900 running bales during the week ended May 4, up from 154,000 RB the prior week, boosted 2016-17 commitments to 14.131 million RB.
Commitments — outstanding sales of 3.455 million RB plus shipments — were just over 100% of the new USDA export forecast and were 5.842 million RB or 70% above year-ago bookings. A year ago, commitments were 93% of final 2015-15 shipments.
All-cotton shipments of 428,400 RB, up from 375,400 RB the previous week and a four-week high, lifted the total for the season to 10.676 million RB, widening the lead over year-ago exports by 248,000 RB to 4.456 million RB or to 72%.
Shipments were 76% of USDAΆs May forecast, compared with 70% of final 2015-16 exports at the corresponding point last season. To achieve the estimate, shipments need to average roughly 282,500 RB per week for the 12 weeks remaining in the marketing year.
All-cotton sales for shipment next season of 159,900 RB, up from 97,200 RB the prior week, brought weekly sales for both marketing years to a healthy 323,800 RB.
Commitments for 2017-18 reached 2.505 million RB, up 211% from year-ago forward bookings of 1.186 million RB. Sales on the books for next season are 18% of USDAΆs initial 2017-18 export forecast, compared with forward bookings a year ago of 8% of the current 2016-17 export estimate.
Meanwhile, final U.S. all-cotton production of 17.17 million 480-pound bales in 2016, up from the January estimate of 16.96 million, rose 33% from the 2015 output, revised figures showed Wednesday.
Yields averaged 867 pounds per harvested acre, up 101 pounds from the previous year and the five-year average of 822 pounds. Record high yields were achieved in Alabama (988 pounds), California (1,660), Kansas (1,099) and Tennessee (1,104).
Upland production of 16.601 million bales climbed 200,000 bales from the January estimate on yields of 855 pounds per acre, up 100 pounds from 2015 and 49 pounds above the five-year average. Final upland plantings are estimated at 9.878 million acres and harvested acres at 9.32 million, an abandonment rate of 5.6%.
Futures open interest declined for a fourth session Wednesday, dropping 3,784 lots to 254,040, with JulyΆs down 3,975 lots to 131,440, DecemberΆs down 442 lots to 105,367 and MarchΆs up 582 lots to 11,534.
Certified stocks dipped 165 bales to 310,768. There were 723 newly certified bales and 888 bales decertified. Awaiting review were 3,245 bales, including 704 at Galveston and 2,541 at Memphis.
