A marketing year high reported in U.S. weekly export sales helped propel a 2.1 percent advance in cotton futures last week.
Spot March gained 150 points for the week ended Thursday to close at 74.19 cents. May and July each rose 144 points to settle at 74.70 and 75.25 cents, respectively, while December edged up 33 points to finish at 71.46 cents.
March finished in the upper third of a 247-point range, all on Tuesday when it traded from 75 cents – highest since Jan. 5 – to 72.53 cents. It settled Monday at its highest close, 74.63 cents, since Aug. 8, posted the weekΆs high on follow-through buying the next session and fell to the low before recovering some of the setback as volume mushroomed.
Cash online grower sales increased to 113,552 bales from 65,552 bales on The Seam. Prices rose to an average of 69.42 cents from 67.32 cents, reflecting gains to 15.75 cents from 14.43 cents in premiums over loan repayment rates. Daily price averages ranged from 67.92 to 70.34 cents.
The volume was the second largest of the marketing year, exceeded only by 197,123 bales that changed hands during the week ended Jan. 5. Growers sold a crop year high of 100,776 bales on Jan. 4, largest one-day volume since The Seam was established in 2000.
All-cotton export sales for shipment this season hit a marketing year high of 463,500 running bales during the week ended Sept. 19, boosting 2016-17 commitments to 9.859 million RB, 81 percent of the USDA estimate.
The USDA report, released Thursday, showed the lead over year-ago bookings widened 305,000 RB to 4.031 million RB or 69 percent. A year ago, commitments were 66 percent of final 2015-16 exports.
Shipments of 241,400 RB brought the seasonΆs total to 4.711 million RB, widening the lead over year-ago exports by 79,000 RB to 1.88 million RB. Shipments were 39 percent of the USDA forecast, compared with 32 percent of final exports at the corresponding point last season. Still, shipments remained behind the pace required to achieve the USDA estimate.
Exports averaging roughly 264,800 RB a week now are needed to reach the estimate, while weekly sales averaging around only 80,900 RB would match the shipments projection.
Sales for next season of 10,400 RB raised 2017-18 commitments to 612,700 RB, down from 828,100 RB in forward bookings a year ago.
On the U.S. crop scene, upland classing of 507,112 RB during the week ended Jan. 19, down from 570,821 RB the previous week, brought the total for the season to 14.573 million RB, up 3.1 million RB from a year ago.
An indicated 92 percent of the upland crop estimate, converted to running bales, had been classed. Tenderable cotton accounted for 67 percent for the week and 70.9 percent for the season.
A year ago, USDA had classed 95 percent of the final upland output, with only 55.6 percent at that time meeting quality requirements for tendering on futures contracts.
Of the U.S. classing for the week, 414,390 RB or 82 percent came from late-harvesting areas of Texas, boosting the statewide total to 6.733 million RB, up from 5.17 million RB a year ago.
By regions, weekly classing runs and totals for the season were 17,556 RB and 3.583 million RB in the Southeast, 6,438 and 3.252 million in the Delta, 445,714 and 7.159 million in the Southwest and 37,404 and 578,952 in the Far West.
Ginning continued in the West Texas Plains, where about 25 percent of the gins have completed operations for the season. Gins north of Lubbock expect to operate into February and March because of above-average yields.
Sample receipts declined at classing facilities, but multiple shifts continued providing classification services. Daily receipts at Lubbock declined to 21,030 samples from 39,030.
Looking ahead, Informa Economics, Memphis-based analytical firm, has estimated U.S. 2017 upland plantings at 10.5 million acres, DTN reported, up 6.3 percent from 9.88 million acres seeded last year.
ThatΆs lower than increases seen in some other early projections. A Farm Futures magazine report showed an intended all-cotton increase to 11.45 million acres, up 13.7 percent from 10.075 million acres in 2016.
The National Cotton Council will report results of its planting intentions survey on Feb. 11 at its annual convention in Dallas. A forecast on acreage intentions also is expected at USDAΆs Outlook Forum, Feb. 23-24, and the National Agricultural Statistics Service will release its prospective plantings report on March 31.
While a lot can happen of course between now and planting time, cotton acreage increases are expected in the Delta, Texas and the Far West. A significant increase is foreseen by some in high-yielding California, owing partly to a substantial snowpack.
Meanwhile, trend-following funds reduced their net longs 6,987 lots or 6.3 percent to 103,910 lots in cotton futures-options combined in the week ended Jan. 17, according to traders-commitments data reported by the Commodity Futures Trading Commission.
They had built a record high net long position the prior reporting week. Index funds shaved their net longs 144 lots to 63,104, while traders with non-reportable positions cut theirs 1,752 lots to 9,682. Commercials bought 8,882 lots, covering 8,006 shorts and adding 876 longs to reduce their net shorts to 176,696 lots.
Open interest coming into Thursday was up 3,026 lots from a week earlier to 263,646 lots, near the highest since 2008 and an indication of fresh fund-spec buying – already near a record high – as prices rose.
Separately, mills added 2,232 lots to their unpriced on-call position in 2016-17 contract months during the week ended Jan. 20, CFTC data showed, while producers added 196 lots. This raised the unfixed positions to 93,978 lots for mills and 8,982 lots for producers.
The net call difference increased 2,036 lots to 84,996, which was 35.9 percent of the then-declining open interest. The unpriced 2016-17 mill position outweighed that of producers by a ratio of 10.46:1.
Duane Howell is retired farm editor of The Avalanche-Journal. His email address is duane.howell@sbcglobal.net.
