July finished at its lowest close since March 5. Mills priced a modest 168 on-call lots of old-crop cotton and added 840 lots in December in the latest CFTC reporting week.
Cotton futures extended a losing streak to six sessions in a row Friday, finishing at the lowest close in spot July since March 5.
July settled down 54 points to 89.82 cents, just off the low of its 108-point range from up 48 points at 90.84 to down 60 points at 89.76 cents. It slipped through longstanding chart support around 90 cents to near another support point at 89.71, the low of March 24.
December closed off 28 points to 82.34 cents, trading from up 18 points at 82.80 to down 44 points at 82.18. It posted its lowest intraday price since April 25 and lowest close since April 21.
For the week, the market shed 254 points in July and 137 points in December. The inverted July-December spread lost 117 points, closing at a 748-point premium on July. The close matched the low seasonal settlement on Tuesday when it traded down to 708 points, lowest since January.
Volume slowed to an estimated 12,200 lots from 16,312 lots the previous session when spreads totaled 4,199 lots or 26% and EFP 42 lots. Options volume totaled 2,085 calls and 4,070 puts.
Mills priced a modest 168 on-call lots of old-crop cotton during the week ended last Friday to trim their unfixed July position to 30,345 lots, according to the latest Commodity Futures Trading Commission call report.
Producers priced 543 lots to shave their small unfixed position to 1,456 lots. The net call difference widened 375 lots to 28,889 (2.889 million bales), which was 24.07% of July’s declining open interest, against 23.48% a week earlier.
The unfixed mill position in July outweighed that of producers by a ratio of 20.84:1, up from 15.26:1 the prior week. Mill fixations are expected to quicken ahead of first notice day for July deliveries on June 24. Scale-down mill pricing this week may have slowed the July descent.
Producers priced 789 lots in December during a reporting week in which the new-crop contract posted two new seasonal intraday highs, reaching up to 84.74 cents on May 8. This reduced their unfixed December position to 18,401 lots.
Mills added 840 December lots to hike their unfixed position there to 12,872 lots. The net call difference held by producers narrowed by 1,629 lots to 5,529, which totaled 8.32% of December’s rising open interest, down from 11.77%.
Meanwhile, repayments reduced U.S. outstanding loans on upland cotton by 123,242 running bales during the week ended May 12, according to the latest USDA figures.
Upland loans outstanding declined to 898,866 bales, including 65,211 bales of Form A issued to individual growers and 833,655 bales of Form G issued to marketing cooperatives or loan servicing agents.
Futures open interest declined 1,420 lots Thursday to 191,108, with July’s down 1,930 lots to 114,395 and December’s up 330 lots to 68,321. Certificated stocks grew 4,031 bales to 405,712. There were 5,196 newly certified bales, 1,165 bales decertified and 4,963 bales awaiting review.
World values as measured by the Cotlook A Index dropped 15 points Friday morning to 92.55 cents. The premium to Thursday’s July futures settlement widened 19 points to 2.19 cents.
Forward A Index values for 2014-15 slipped 25 points to 90.05 cents, widening the discount to the 2013-14 index by 10 points to 2.50 cents and the premium to Thursday’s December futures close by a point to 7.43 cents.
For the week, the index for 2013-14 lost 175 points and the new-crop index fell 65 points.
DTN Closing Cotton Commentary 10/21 14:55 Cotton Snaps String of Five Lower Closes Producers advised to keep an eye out for cotton aphids on the Texas High Plains. Aphids can cause sticky cotton where bolls are open. By Duane Howell DTN Cotton Correspondent Cotton futures rallied from a 12-session low in spot December to settle higher Tuesday and snap a string of five consecutive lower closes. December gained 50 points to close at 62.79 cents, just below the middle of its 153-point range from down 19 points at 62.10 -- the lowest intraday price since Oct. 3 -- to up 134 points at 63.63 cents. March settled up 21 points to 61.91 cents, a couple of ticks above the midpoint of its tight 72-point range from down 17 points at 61.53 to up 55 points at 62.25 cents. Volume slowed to an electronically estimated 17,500 lots from a final 19,212 lots the previous session when spreads accounted for 9,716 lots or 51% and EFP 20 lots. While most harvestable bolls now are safe from injury from insect pests, cotton aphids still could be a concern on the Texas High Plains, says Aburba Barman, extension entomologist at Lubbock. "This is especially true for plants with some open bolls and with a considerable amount of new growth that could be a potential site for development of cotton aphid populations," he said in a Focus on South Plains Agriculture report. Harvesting has begun, but some fields still have cotton with several nodes worth of green leaves and actively growing terminals. Barman said he has seen a few fields infested with cotton aphids. In fact, an experimental field at Lubbock has been sprayed for the pests. Aphids can be either wingless or winged, but the entomologist said winged adults are more prevalent late in the season. They easily can be blown over long distances, he said, adding that fields can be infested within a short time. Cotton aphids prefer young leaves, growing points, young fruits and tender stems, Barman said, advising checking those plant parts to spot the pests. Checking for beneficial insects also is a good idea, he said, because they have potential to suppress aphids and thus avoid insecticidal applications. At this time, the primary concern with aphids is whether they would cause sticky cotton with their honeydew, Barman pointed out. If weather conditions are favorable and beneficial insect activities low, aphid populations can grow at a faster pace and may result in sticky cotton where there are open bolls, he noted. A quarter-inch rain sometimes can help to get rid of sticky cotton. The sticky stuff can cause problems in processing. "It may be desirable to plan for harvest-aid applications if a field is ready rather than leaving the crop available for cotton aphids," Barman said. The threshold for aphids is 10 per leaf when there are cracked bolls on the plant, the entomologist said. There are several effective insecticides for cotton aphids, he said. Futures open interest declined 494 lots Monday to 189,330, with December's down 1,778 lots to 94,584 and March's up 694 lots to 68,686. Cert stocks remained at 15,959 bales. World values as measured by the Cotlook A Index dropped 35 points Tuesday morning to 69.70 cents, matching the low for the marketing year on Oct. 3. The premiums to Monday's futures settlements widened 36 points to 7.41 cents over December and narrowed 32 points to 800 over March. (RQ) Copyright 2014 DTN/The Progressive Farmer. All rights reserved.
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