DTN Cotton Close: Settles Midrange on New Low
U.S. export commitments remained around 105% of the USDA estimate and shipments reached about 95%. Stock market indexes hit record marks on strong jobs report.
Cotton futures fell to yet another new low close for the move in benchmark December Thursday, finishing with the fourth weekly loss in a row and the eighth in the last nine weeks.
December closed the holiday-shortened trading week off 41 points at 72.06 cents, in the middle of its 110-point range from up 15 points at 72.62 to down 95 points at 71.52 cents. It lost 279 points for the week and settled at the lowest close on its weekly chart since early June 2012.
Volume slowed to an estimated 12,100 lots from 14,532 lots the previous session when spreads totaled 4,669 lots or 32% and EFP 32 lots. Options volume totaled 3,430 calls and 2,846 puts.
Net U.S. all-cotton weekly export sales of 41,500 running bales during the week ended June 26, up from 4,600 bales the previous week, brought 2013-14 commitments to 10.714 million bales.
Commitments remained around 105% of the USDA estimate, compared with nearly 107% a year ago and a five-year average for upland cotton of about 108%. A tight old-crop balance sheet will affect the size of unshipped old-crop sales carried into the new marketing year.
Net sales for delivery next season climbed to 59,800 running bales from 24,100 bales, boosting 2014-15 commitments to 2.429 million bales. New-crop bookings are 390,000 bales ahead of forward sales a year ago.
New-crop commitments have reached about 26% of USDA’s 2014-15 export forecast. A year ago, forward bookings totaled about 20% of the current 2013-14 export estimate.
All-cotton shipments of 175,100 running bales, up from 138,100 bales the previous week, lifted the total for the season to 9.66 million bales. Shipments are about 95% of the USDA estimate, about the same as the percentage of final exports a year ago.
Shipments lagged 2.353 million running bales or about 20% behind exports a year ago. Outstanding sales have declined to 1.054 million bales, compared with 1.456 million last year.
To achieve the USDA estimate, all-cotton shipments need to average roughly 131,400 running bales a week.
Meanwhile, a holiday-shortened session on Wall Street ended with multiple records as the Dow Jones Industrial Average topped 17,000 for the first time after the June nonfarm payrolls report came in much stronger than expected.
U.S. employers added 288,000 jobs in June, the Bureau of Labor Statistics said. The data came a day earlier than usual because of the Fourth of July holiday.
The unemployment rate fell to 6.1% in June. Economists had expected the addition of 215,000 jobs last month and the unemployment rate to remain steady at 6.3%.
Futures open interest dipped 47 lots Wednesday to 146,189, with July’s down one lot to 1,889 and December’s down 624 lots to 120,295. Cert stocks grew 1,243 bales to 462,584. There were 2,522 newly certified bales, 1,279 bales decertified and 17,790 bales awaiting review.
World values as measured by the Cotlook A Index fell 100 points Thursday morning to 87.40 cents. The premium to Wednesday’s July futures settlement narrowed 61 points to 10.71 cents.
Forward A Index values for 2014-15 dropped 90 points to 80.10 cents, narrowing the discount to the 2013-14 index by 10 points to 7.30 cents and widening the premium to Wednesday’s December futures close by three points to 7.63 cents.
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