DTN Cotton Open: Tumbles to Triple-Digit Losses
Most-active May slipped below lows of the previous 11 sessions on heavy early volume. Cash online sales increased to 12,346 bales on The Seam.
Cotton futures fell to triple-digit losses in nearby contracts in the early going Friday, with most-active May slipping below lows of the prior 11 sessions ahead of a long holiday weekend.
May hovered off 102 points to 75.75 cents, the low of its 118-point range on a heavy volume for this time of day of 7,969 lots. It posted the session high at 76.93 cents in the early minutes of the overnight session.
March traded down 114 points at 73.87 cents on a turnover of 4,462 lots. First notice day is Wednesday and the market is closed Monday for Presidents Day. July fell 94 points to 76.66 cents on a volume of 1,743 lots. December lost 63 points to 73.70 cents on 611 lots.
In outside markets, U.S. dollar index futures traded up 0.125 to 100.555, while Dow Jones futures dropped 70 points and S&P futures 7.25 points. Crude oil fell 33 cents to $53.03, Brent crude dipped 30 cents to $55.70 and April gold gained $1.80 to $1,243.40. March corn was down 0.9%, March soybeans 0.7%, March Chicago wheat 0.8% and March Kansas City wheat 0.6%.
Earlier, Asian stock markets were lower, down 0.58% in Japan’s Nikkei 225, 0.31% in Hong Kong’s Hang Seng, 0.86% in China’s Shanghai Composite and 0.06% in South Korea’s Kospi. In Europe, Germany’s DAX dropped 0.05% and France’s CAC 40 fell 1.08%. Britain’s FTSE 100 edged up 0.06%.
China’s Zhengzhou cotton futures remained weak and prices settled mostly lower on the China National Cotton Exchange. India’s MCX cotton futures were weak and local prices eased.
In ICE cotton futures Thursday, May settled lower for the third session in a row. It closed back below its nine-day moving average and near nearby chart support at 76.05.
The March-May switch traded from 156 to 180 points carry and widened 19 points to settle at 176 points on 15,677 lots. May-July traded from 65 to 87 points carry and widened 11 points to close at 83 points on 2,764 lots.
The inverted July-December straddle narrowed 16 points to finish at a 327-point July premium after trading from 362 to 323 points on 1,507 lots.
In cash online trading, total sales on The Seam increased to 12,346 bales from 4,324 bales. Prices averaged a gross 72.22 cents, up from 70.59 cents. Gross premiums over loan repayment rats dropped to 18.94 cents from 19.34 cents.
The Cotlook A Index of world prices declined 75 points to 85.80 cents, narrowing the premium over the prior-day May futures settlement eight points to 8.52 cents.
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The bulls were again winners in an exciting week for longs and producers. In last week’s report, I said the markets bias would be near unchanged to a bit lower.