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DTN Closing Cotton            02/23 14:51

   Cotton Finishes on Weekly Gain of 5.4% in May

   U.S. all-cotton weekly export sales for both crop years rose to 579,900 RB. 
Shipments climbed to 402,700 RB. Exports projected to rise to 16 million bales 
next season. Smaller crop forecast for 2018-19.

By Duane Howell
DTN Cotton Correspondent

   Cotton futures finished strongly ahead Friday, with most-active May settling 
on its highest close since Jan. 25 following another round of 
expectations-topping U.S. weekly export sales. 

   May closed up 187 points to 81.34 cents, near the high of its 205-point 
range from down 10 points at 79.37 to up 195 points at 81.42 cents. It gained 
187 points or 5.4% for the week. 

   Maturing March settled up 91 points to 81.45 cents and July finished up 166 
points to 82.07 cents. December hit a new contract high at 76.68 cents and 
closed up 24 points to 76.60 cents. 

   Volume increased to an estimated 29,600 lots from 27,486 lots the previous 
session when spreads accounted for 12,758 lots or 46% and EFP 17 lots. Options 
volume rose to 6,916 lots (3,688 calls and 3,288 puts) from 1,941 lots (1,001 
calls and 940 puts). The daily trading limit reverted Friday to 300 points. 

   Net all-cotton export sales for shipment this season came in at a stout 
402,700 running bales for the week ended Feb. 15, up from 367,600 RB the prior 
week and 380,700 RB for the corresponding week last season.

   General expectations had been for sales to slow because of Lunar New Year 
holiday influences in China, but China topped a list of broad-based demand from 
20 countries. 

   Commitments -- outstanding sales of 7.663 million RB plus shipments -- 
reached 13.384 million RB, maintaining a lead of about 21% over cumulative 
year-ago sales and rising to 95% of the USDA export forecast. Year-ago 
commitments were about 76% of final 2016-17 shipments. 

   New-crop sales of 177,200 RB boosted the total for both crop years to 
579,900 RB, up from 498,400 RB the week before. Commitments for 2018-19 rose to 
2.038 million RB, compared with 999,400 RB in forward bookings a year ago. 

   Sales on the books for next season already have reached about 13% of the 
new-crop export projection unveiled Friday at the USDA Agricultural Outlook 
Forum. Forward bookings a year ago were about 7% of the current 2017-18 export 
estimate. 

   All-cotton shipments quickened to 402,700 RB from 367,600 the prior week and 
brought the total for the season to 5.721 million RB, 531,000 RB behind 
year-ago exports. Shipments have reached about 41% of the USDA estimate, 
compared with 43% of final exports last year. 

   To achieve the USDA estimate, shipments need to average roughly 362,800 RB 
per week over the 23-plus weeks remaining in the marketing year, while sales 
are within 681,000 RB of matching the export forecast. 

   At the Outlook Forum, USDA projected U.S. 2018-19 harvested acreage at 11.3 
million, an abandonment rate of 15% off plantings of 13.3 million acres, and 
forecast yields of 828 pounds and a crop of 19.5 million bales. 

   (The figures are for all cotton, not just for upland as incorrectly reported 
for the planted area in the closing comments here Thursday.) 

   The 2018-19 projections compared with 2017-18 estimates are up 5.5% from 
12.61 million acres in the planted area, down 0.4% from 11.35 million acres (an 
abandonment rate of 10%) in the harvested area and down 7.9% from 899 pounds in 
yields. 

   Domestic mill use is projected at 3.4 million bales, up 1.5% from 3.35 
million estimated for this season, with a total market offtake of 19.4 million 
bales, up 8.7% from 17.85 million. Ending stocks are forecast unchanged at 6 
million bales, reflecting a stocks-to-use ratio of 30.9%, down from 33.6%. 

   Futures open interest expanded 3,729 lots to 256,700 on Thursday, with 
March's down 270 lots to 781 and May's up 1,901 lots to 128,325. Certified 
stocks were unchanged at 93,388 bales. Awaiting review were 1,014 bales at 
Galveston.


(BE)

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