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DTN Cotton Open: Ticks Slightly Lower Within Tiny Ranges

Ernst Undesser
By Duane Howell DTN Cotton Correspondent February 16, 2017

DTN Cotton Open: Ticks Slightly Lower Within Tiny Ranges

©Debra L Ferguson Stock Images

U.S. weekly upland export sales came in at 222,200 RB and upland shipments slipped to 344,900 RB. Overall cash online sales declined to 4,324 bales on The Seam.

Cotton futures ticked slightly lower within tiny ranges in early dealings Thursday, expanding the overnight trading span only a bit on the heels of the U.S. weekly export sales report.

Most-active May dipped 12 points to 77.16 cents, trading within a mere 38-point range from 77.06 to 77.44 cents on a contract volume of 3,867 lots. March slipped 14 points to 75.57 cents on a turnover of 2,674 lots, July dropped 18 points to 77.82 cents on 728 lots and December eased 7 points to 74.50 cents on 325 lots.

Net upland export sales for shipment this season of 222,200 running bales during the week ended Feb. 9 were up 7% from the previous week but down 34% from the prior four-week average, USDA reported.

Sales went to 19 countries, led by Turkey, Mexico, Vietnam, Bangladesh and Indonesia. Gross sales were 264,900 RB and cancellations were 42,700 RB. Sales for delivery next season rose to 123,300 RB from 46,000 RB the week before.

Upland shipments of 344,900 RB declined 24% from the prior week’s marketing year high but rose 10% from the four-week average. Shipments went to 21 countries. The leading destinations were Vietnam, China, Pakistan, Turkey and Indonesia.

Pima sales for shipment this season of 12,700 RB, up from 4,000 RB the previous week, went primarily to China, India, Pakistan and Thailand. Shipments of the extra-long staple cotton of 18,400 RB rose 55% from the previous week and 54% from the four-week average.

In outside markets, U.S. dollar index futures traded down 0.395 to 100.770 after closing slightly lower Wednesday, while Dow Jones futures ticked down 25 points and S&P futures 3.25 points following Wall Street’s record-setting run.

Crude oil gained 29 cents to $53.40, Brent crude also was up 29 cents to $56.39 and April gold gained $4.60 to $1,237.70. March corn, March soybeans and March Kansas City wheat were off 0.1% and May Chicago wheat was little changed.

Earlier, Asian stock markets were mixed, down 0.47% in Japan’s Nikkei 225, up 0.47% in Hong Kong’s Hang Seng and 0.51% in China’s Shanghai Composite Index and down in 0.10% in South Korea’s Kospi. European stocks traded lower, down 0.28% in Germany’s DAX and 0.39% in France’s CAC 40. Britain’s FTSE 100 was down 0.28%.

China’s Zhengzhou cotton futures and prices on the China National Cotton Exchanged ended lower. India’s MCX cotton futures were virtually unchanged.

In ICE cotton futures Wednesday, May finished on a moderate loss below the prior session’s inside-range low. May settled even with its 2016 high (77.28 on Aug. 5) after having posted back-to-back settlements above it.

The March-May spread traded from 127 to 165 points carry and narrowed six points to settle at 157 points on a volume of 10,311 lots. May-July traded from 86 to 69 points carry and also narrowed six points to close at 72 points on 3,009 lots.

The inverted July-December intercrop straddle narrowed 81 points to a settlement premium on July of 343 points on a volume of 1,739 lots.

In cash online trading, overall sales declined to 4,324 bales from 8,567 bales on The Seam. Prices averaged a gross 70.59 cents, down from 71.09 cents, with gross premiums over loan values dropping to 19.34 cents from 19.70 cents.

World prices as measured by the Cotlook A Index dropped 25 points to 86.55 cents, widening the premium over the prior-day May futures settlement by a point to 8.60 cents.

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent February 16, 2017