“Spot May lost 201 points for the week ended Thursday to close at 61.22 cents, while July dropped 159 points to 61.90 cents and December shed 151 points to 63.23 cents”The price descent slowed amid scale-down mill buying against predominantly speculative selling after the market fell sharply on the USDA supply-demand report on Tuesday”Then a softening of the U.S. dollar index from a 12-year high against major currencies and oversold technical readings helped the lead contract to snap a 10-session losing streak, longest in 16 months, on Thursday as weekly export sales data returned to the positive side”With U.S. cotton priced in dollars, strength in the greenback increases the cost for foreign mills, which are expected to account for 75 percent of the market offtake of the domestic crop this season”May bounced after posting back-to-back lows at 60.28 and 60.26 cents, lowest since Feb. 3. It had retraced nearly 75 percent (60.02) of the 829-point rally from the Jan. 23 low to the Feb. 26 high”Cash grower sales slowed to 5,966 bales on The Seam, smallest since October. Prices averaged 51.36 cents, down 17 points from the previous week, reflecting a 182-point decline to 6.29 cents in premiums over loan repayment rates”Net U.S. all-cotton export sales for shipment this season came in as mostly expected at 51,500 running bales during the week ended March 5. Gross sales of 109,600 bales topped cancellations of 58,100 bales”Upland net sales were 38,600 bales, compared with net cancellations of 62,500 bales the previous week, and net Pima sales rose to 14,700 bales, up 66 percent from the four-week average”Sales went to 17 countries, indicating that machine-picked U.S. cotton remains in broad demand amid dwindling availability of domestic high grades. The leading upland buyers were China, 20,300 bales; Taiwan, 12,000; Thailand, 7,700; Vietnam, 7,400; and Bangladesh, 5,200″All-cotton shipments slipped to 320,000 running bales from the prior week’s marketing year high of 363,500 bales, with upland exports rising 9 percent from the four-week average to a strong 307,800 bales. Shipments have remained ahead of the pace — now pegged at an average of 254,400 bales a week — to achieve the USDA forecast”New-crop sales jumped to 92,800 bales from 22,000 bales the prior week, bumping 2015-16 commitments to 830,900 bales. These 2015-16 commitments were behind forward bookings a year ago of 940,100 bales”Earlier, the U.S. 2014-15 supply-demand balance sheet was unchanged from last month, as widely expected”However, USDA shaved its estimate of the marketing year average farm price by 50 points to a midpoint of 60.50 cents, down from 77.90 cents last season. The crop-year average is forecast to range between 59 and 62 cents”Marginal cuts in world production and consumption boosted global ending stocks by 220,000 bales to an all-time high of 110.06 million, 99.2 percent of expected use. Put another way, the stocks are forecast within fewer than a million bales of world cotton consumption”Global consumption fell 290,000 bales to 110.96 million, primarily because of a 500,000-bale cut to 35 million in China where continued expansion in yarn imports is displacing growth in domestic cotton spinning. China still accounts for about a third of global mill use”China’s projected mill use, up slightly from last season, is far below the record of 51 million bales consumed in 2007-08. Imports of cotton yarn have replaced a substantial portion of the loss in domestic cotton spinning. Yarn imports this season could top more than 9 million-bale-equivalents, nearly triple the imports of just four years ago”The reduced consumption in China from a month ago is expected to be partly offset by increases of 100,000 bales each to 4.45 million in Bangladesh, 3.65 million in Vietnam and 3.3 million in Indonesia”World production eased down 130,000 bales on the month to 119.24 million, with a 100,000-bale increase to 10.5 million in Pakistan offset mainly by a 100,000-bale reduction to 6.21 million in Central Asia”Global cotton exports rose by 200,000 bales to 34.4 million, with Brazil’s exports projected up 350,000 bales to 3.75 million”Beginning stocks eked up 50,000 bales to 101.71 million on slightly higher carry-in stocks in Central Asia”China’s ending stocks grew by 500,000 bales to 64.96 million, 59 percent of the projected world carryout”Stocks in the rest of the world are projected at 45.10 million bales, down 280,000 bales from last month but up 6.1 million bales from beginning stocks”On the new-crop scene, U.S. upland growers had forward-contracted about 31,400 acres of their expected 2015 plantings by Feb. 28, down from 176,711 acres a year ago, according to informal surveys by the cotton program of USDA’s Agricultural Marketing Service”Growers had booked around 24,878 acres in the Southeast and around 6,500 acres in the Southwest. No contracting had been reported in the Mid-South or the Far West”Meanwhile, trend-following funds again expanded their net long position, though at a slower pace, during the week ended March 3, buying 7,313 lots in futures-options combined, according to government data”This boosted their net longs to 46,674 lots, largest since May 27, when the market was retreating from an important top. Index funds increased their net longs by 1,440 lots to 54,945, while traders with non-reportable positions decreased theirs by 1,076 lots to 6,168″Commercials raised their net shorts by 7,677 lots to 107,787, adding 6,796 shorts and liquidating 881 longs. In futures only, non-commercials expanded their net long position by 3.3 percentage points to 28.7 percent of the rising open interest”
Date:3/16/2015
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