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Weekly Cotton Comments                 03/16 07:09

   Cotton Still Feels Vibes From Big Reversal

   Market slipped despite strong export sales. Commitments for 2017-18 stand 
19% above a year ago. Strong cumulative sales support prospects for 
above-average shipments ahead. Traders appeared to have wait-and-see attitude 
on trade actions. Upland classing reached 18.984 million RB, 17% above last 
season's final count.

By Duane Howell
DTN Cotton Correspondent

   Despite strong U.S. weekly export sales and shipments, cotton futures 
finished the marketing week in the red. 

   May dropped 159 points for the week ended Thursday to close at 83.53 cents, 
coiling two straight sessions within the prior-day trading ranges. It finished 
in the lower half of the week's 351-point range from 85.55 to 82.04 cents, 
still feeling vibes from the March 6 bearish 489-point reversal from the 
contract high of 86.60 cents. 

   July lost 95 points to settle at 83.60 cents, regaining a premium over May, 
and December dipped 30 points to 78.19 cents. December hit a new contract high 
at 78.94 cents on Tuesday, supported by dry soils in the Texas High Plains. 

   Cash online sales slowed to 28,028 bales from 51,647 bales on The Seam. 
Prices averaged 72.58 cents, down from 73.86 cents. Premiums over loan rates 
slipped to an average of 23.80 cents from 24.31 cents. Daily price averages 
ranged from 70.20 to 74.61 cents. 

   The high overall average price came on a turnover of 4,559 bales on 
Thursday, including 4,472 bales on the grower-to-business exchange that brought 
an average of 74.64 cents per pound. The G2B cotton, all from the Southwest, 
included 3,354 bales or 75 percent of staples 35 or longer. 

   Net all-cotton export sales for shipment this season of 328,800 running 
bales during the week ended March 8 boosted 2017-18 export commitments to 
14.405 million RB, USDA's weekly report showed Thursday. 

   Upland net sales of 321,400 RB, down 11% from the prior four-week average, 
went to 20 countries. The sales were within a reported range of expectations 
from 300,000 to 375,000 RB. 

   Commitments -- outstanding sales of 7.402 million RB plus shipments -- 
topped year-ago cumulative sales by 2.293 million RB or 19% and were 100.3% of 
the latest USDA export projection. A year ago, commitments were about 84% of 
final 2016-17 exports. 

   Net sales for shipment next season of 199,200 RB lifted the weekly total for 
both crop years to 528,000 RB and raised 2018-19 bookings to 2.611 million RB, 
up 1.186 million RB from forward sales a year ago. 

   Commitments for 2018-19 reached about 17% of the 13-year high forecast by 
USDA at its Agricultural Outlook Forum last month. That compares with forward 
bookings of about 10% of the current 2017-18 estimate a year ago. 

   All-cotton shipments of 439,900 RB, down from the prior week's 12-year high 
of 551,300 RB, brought the season's total to 7.003 million RB, now about 
466,000 RB or 6% behind the year-ago pace. Upland shipments of 414,400 RB, up 
14% from the four-week average, went to 23 countries. 

   Shipments are about 49% of the 2017-18 projection, compared with about 52% 
of final 2016-17 exports at the corresponding point last season. To achieve the 
forecast, shipments need to average roughly 355,000 RB a week for the remainder 
of the season. 

   The report appeared to solidify expectations for another increase in USDA's 
2017-18 export projection, now forecast at the third highest ever, only 80,000 
bales behind last season's second highest. 

   Shipments are in the middle of the peak period of U.S. cotton exports, and 
the strong commitments support prospects for above-average shipments for the 
remainder of the marketing year ending July 31. 

   Traders seemed to have weighed with mostly a wait-and-see attitude concerns 
that the Trump administration's protectionist actions could trigger retaliation 
by trading partners, eventually weaken world economic growth and crimp growing 
cotton demand. 

   World cotton use this season is forecast by USDA at 120.8 million bales, up 
5% or 6 million bales from last season. Cotton consumption has been rising 
steadily for several years, but this season's well-above-average growth is 
attributable to an expanding global economy and a slowdown in polyester 

    China, the world's leading spinner of raw cotton and producer of polyester 
fiber, is projected to account for a third of global mill use. Its cotton 
consumption is forecast at 40 million bales, up from 37.5 million last season 
and the highest since 2010-11. 

   Also, China's cotton yarn imports could include the equivalent of an 
additional 8.5 million bales of raw fiber to support its growing textile and 
apparel industry. Raw cotton imports are forecast at 5.1 million bales, up from 
5.03 million in 2016-17 and 4.41 million in 2015-16. 

   China continues to reduce its cotton stocks that reached a peak in 2014-15 
at 66.92 million bales, 196.4% of its domestic use. Its 2017-18 cotton stocks 
are projected to decrease 15% (7.5 million bales) to 41 million bales, lowest 
since 2011-12 but 102.4% of use. 

   On the U.S. crop scene, weekly upland classing of the 2017 crop slowed to 
140,741 RB from 183,869 RB the prior week, boosting the season's total to 
18.984 million RB, up 17% from last season's final 16.157 million RB. 

   Gins submitting samples for grading declined to 66 from 81 the prior week 
and 534 for the season. Tenderable cotton dipped to 67.9% for the season, down 
from last season's final 72%. 

   The Abilene and Lubbock classing facilities accounted for a combined 120,104 
RB or 85% of the week's run. Abilene graded 62,091 RB from the Texas Rolling 
Plains, Oklahoma and Kansas and Lubbock classed 58,013 RB from the High Plains. 
Classing at Lamesa dwindled to fewer than 500 RB. 

   Classing of Pima or extra-long staple cotton has climbed to 673,757 RB from 
last season's final 618,030 RB, with all-cotton classing rising to 19.658 
million RB from 16.775 million RB. The latest USDA production estimate is 22% 
above last season's output. 

   Meanwhile, producers expected to begin receiving prefilled applications for 
the new cotton ginning cost-share program and also have the option of signing 
up at their local Farm Service Agency office. Signup began Monday and will 
extend through May 11. 

   Duane Howell can be reached at


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