DTN Cotton Open: Strong Gains on Higher Volume
Cotton futures hit a multi-week high and traded near there Friday, extending gains from the previous day in this next-to-last trading session of the month and quarter.
Benchmark December hovered up 130 points to 86.77 cents at 8:13 a.m. CDT, trading within a 132-point range from 85.48 to 86.80 cents on an improved contract volume of 4,458 lots. March gained 118 points to 86.36 cents on a turnover of 1,121 lots.
The market advanced on follow-through buying after reports Thursday of a reduced crop estimate in China and flooding rains in India added to ongoing jitters about the late and small U.S. crop.
In the news, Americans spent more liberally in August, reflecting healthier paycheck gains that could lift the economy in coming months, Dow Jones Newswires reported.
Personal spending, which measures how much Americans spent on items ranging from cars to health care, rose 0.3% in August from a month earlier the Commerce Department said. That followed an upwardly revised 0.2% gain in July. Personal incomes — including wages, investment returns and government aid — climbed 0.4%.
The gains in spending and income were precisely in line with economists’ expectations.
In outside markets, Dow Jones futures fell 42 points and S&P 6.75, while dollar in futures slid 0.308 to 80.330, crude oil dropped 9 cents to $102.43, Brent crude dipped 52 cents to $107.76 and gold gained $12.20 to $1,336.30. December corn was lower, November soybeans higher and December wheat lower.
China’s Zhengzhou cotton futures closed mostly higher, up 140 yuan or 0.70% in November, up 55 yuan or 0.28% in January and up 30 yuan or 0.15% in March. The other contracts were up 20 to down 5 yuan.
In U.S. futures Thursday, December closed higher for the third day in a row and settled within 31 points of last week’s four-month high.
The December-March spread traded between premiums on December of 15 and 32 points and widened six points to close at 29 on a volume of 1,853 lots, while March-May settled at a three points March-over from eight points May-over after trading between five points May-over and 10 points March-over on a volume of 345 lots.
In cash trading, grower-to-business sales increased to 841 bales from 211 bales on The Seam. Prices fell to an average of 77.42 cents from 84.42 cents, reflecting a decline to 28.92 from 29.36 cents in premiums over loan repayment rates.
Business-to-business sales totaled 1,810 bales, up from 1,734 bales, on prices averaging 76.64 cents, down from 80.42 cents, and premiums of 29.55 cents, up from 28.27 cents.
The grower sales included 288 bales of staples 35 or more and 553 bales of staples 34 or less, while the business sales included 594 and 1,216 bales, respectively.
Growers sold 85 bales from the Southeast and 756 bales from the Southwest. All the business sales came from the Southwest.
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The ICE Dec and Mar contracts gave back 160 and 87 points on the week, respectively, as last week’s inversion between the two contracts gave way to partial carry. Well,