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DTN Cotton Open: Ticks Lower Within Pre-Report Range

Ernst Undesser
By Duane Howell DTN Cotton Correspondent May 18, 2017

DTN Cotton Open: Ticks Lower Within Pre-Report Range

©Debra L Ferguson Stock Images

U.S. weekly upland export sales came in within the range of expectations at 120,700 running bale. Upland shipments of 388,000 RB remained above the pace needed to reach the USDA estimate.

 

 

Cotton futures ticked lower early Thursday, with spot July remaining within the range established prior to USDA’s weekly export sales-shipments report.

July hovered off 37 points at 79.80 cents, trading within a 127-point range from 80.63 to 79.36 cents on a contract volume of 4,018 lots. December ticked down 80 points to 73.66 cents, trading within a 92-point range from 74.47 to 73.55 cents on a turnover of 2,450 lots.

Net U.S. upland sales during the week ended last Thursday of 120,700 running bales for shipment this season came in within the range of expectations, down 25% from the previous week and 26% from the prior four-week average.

Sales went to 15 countries, led by Vietnam, Turkey, Indonesia, Thailand and China. Gross sales were 182,300 RB and cancellations were 61,600 RB. Commitment reductions included for India and Japan.

Net upland sales for shipment next season of 165,100 RB, up from 146,400 RB the prior week, went to 12 countries, primarily to China, Vietnam, Bangladesh and Taiwan.

Upland shipments of 388,000 RB dropped 6% from the prior week but rose 9% from the four-week average. Shipments went to 26 countries, headed by Vietnam, India, China, Turkey and Indonesia.

Net sales of Pima for this season of 6,500 RB climbed 95% from the prior week and 21% from the four-week average, while sales for next season of 5,400 RB compared with none the previous week. Shipments of the extra-long staple cotton of 11,300 RB fell 28% from the previous week and 22% from the four-week average.

In outside markets, U.S. dollar index futures traded up 0.12 to 97.58, while Dow Jones futures dropped 79 points and S&P futures 7.50 points. Crude oil slid 52 cents to $48.55, Brent crude shed 55 cents to $51.66 and June gold eased 90 cents to $1,257.80. The grains complex was lower, down 1.7% in July corn, 2.1% in July soybeans and 0.6% in July Chicago wheat and July Kansas City wheat.

Earlier, global stocks markets fell on the heels of steep losses in U.S. equities the day before amid concerns that political developments in Washington could hinder President Trump’s economic agenda.

Asian markets closed down 1.32% in Japan’s Nikkei 225, 0.62% in Hong Kong’s Hang Seng, 0.27% in South Korea’s Kospi and 0.45% in China’s Shanghai Composite Index. European markets traded down 1.02% in Britain’s FTSE 100, 0.67% in Germany’s DAX and 1.01% in France’s CAC 40.

China’s Zhengzhou cotton futures retreated further and prices settled mostly lower on the China National Cotton Exchange. India’s MCX cotton futures were higher but local prices eased.

In ICE cotton futures Wednesday, July reversed off a triple-digit morning gain to close with a triple-digit loss, settling 10 ticks below its old contract high of 80.27 cents set on March 6. Talk of sales cancellations amid rising certified stocks contributed to the pressure, despite fresh U.S. dollar weakness. The economically sensitive cotton market also may have felt vibrations from sharp losses in U.S. equities.

The inverted July-December straddle traded from 817 to 530 points and narrowed 127 points to settle at a 571-point July premium on a volume of 8,335 lots. December-March traded between an inverted 66 and 85 points and narrowed 14 points to close at a 71-point December premium on 502 lots. (A quote service reported a couple of incorrect closes Tuesday, changing some spread differences from an earlier report.)

Cash online trading was inactive on both the grower-to-business and business-to-business exchanges on The Seam.

The Cotlook A Index of world values fell 410 points to 90.80 cents, narrowing the premium over the prior-day July futures settlement 10 points to 9.48 cents.

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent May 18, 2017