DTN Cotton Open: Trades Slightly Mixed in Early Dealings
May bounced from overnight dip below prior-day low. Global equities mixed as finance ministers meet. Cash online sales declined to 5,966 bales on The Seam.
Cotton futures ticked slightly mixed in early dealings Friday, with spot May up from an overnight dip to just below the prior-day low and positioned for a weekly gain.
May hovered up 15 points to 78.32 cents, trading within a 70-point range from 77.90 to 78.60 cents on a contract volume of 2,444 lots. It closed last Friday at 77.29 cents. July edged up 14 points to 79.26 cents on a turnover of 740 lots and December slipped 16 points to 75.30 cents on 685 lots.
In outside markets, U.S. dollar index futures traded little changed, up 0.015 at 100.200. Dow Jones futures gained 32 points and S&P futures 0.75 point. Crude rose 34 cents to $49.09, Brent crude added 21 cents to $51.95 and April gold ticked up $2.80 to $1,229.90. May corn was down 0.1%, May soybeans off 0.3%, May Chicago wheat little changed and May Kansas City wheat up 0.1%.
Earlier, global stocks were mixed as traders eyed a meeting of finance and central bankers from the Group of 20 top industrial and emerging countries Friday and Saturday in the southern German resort town of Baden-Baden.
In Asia, Japan’s Nikkei 225 finished down 0.4%. Hong Kong’s Hang Seng edged up 0.1%, China’s Shanghai Composite Index lost nearly 1%, South Korea’s Kospi gained 0.7% and India’s Sensex was up 0.3%. In Europe, France’s CAC 40 dipped 0.1% in early trading and Germany’s DAX fell 0.5%. Britain’s FTSE 100 inched up nearly 0.1%.
China’s Zhengzhou cotton futures lost ground and prices ended mostly lower on the China National Cotton Exchange. The target price subsidy in China’s top cotton-producing area of Xinjiang will remain at 18,600 yuan per metric ton from 2017 to 2019, officials announced.
In ICE cotton futures Thursday, May touched a seven-session high following a strong U.S. weekly export sales and shipments report and settled near the day’s low on a marginal gain.
The May-July traded from 89 to 105 points carry and narrowed six points to settle at 95 points July/over on a volume of 3,722 lots. The inverted July-December straddle traded from 430 to 356 points and narrowed eight points to settle at a 366-point premium on July on 2,457 lots. Inverted December-March widened five points to a 23-point settlement premium on December.
In cash online trading, overall sales slipped to 5,966 bales from 7,388 bales on The Seam. Prices rose to a gross average of 74.30 cents from 73.17 cents, with premiums over loan repayment rates rising to a gross average of 20.43 cents from 20.24 cents. Offerings were 67,851 bales.
The Cotlook A Index of world values gained 100 points to 87.40 cents, widening the premium over the prior-day May futures settlement seven points to 9.32 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.