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DTN Cotton Open: Ticks Down As July Hits 5-Day Low

Ernst Undesser
By Duane Howell DTN Cotton Correspondent May 19, 2017

DTN Cotton Open: Ticks Down As July Hits 5-Day Low

©Debra L Ferguson Stock Images

July positioned for bearish outside-range weekly reversal after making daily limit moves in both directions earlier this week. U.S. dollar index futures and stock markets experienced eventful week.

Cotton futures ticked lower early Friday, with spot July sliding to a five-session low following moves at daily limits in both directions earlier this week.

July hovered off 43 points to 78.81 cents, near the low of its 75-point range from 79.50 to 78.75 cents on contract volume of 2,794 lots. It’s on track for a bearish outside-range weekly reversal, having closed last Friday at 82.18 cents.

December dipped 11 points to 73.53 cents, trading within a 55-point range from 74.05 to 73.50 cents on a turnover of 670 lots.

In outside markets, U.S. dollar index futures slumped to its lowest level since President Trump’s election victory in November, while stock markets recovered their poise in an eventful week that saw leading stock markets climb to record highs and then plunge.

Greenback futures traded down 0.530 to 97.240, while Dow Jones futures ticked up 22 points and S&P futures up 6 points. Crude oil gained 62 cents to $49.97, Brent crude added 79 cents to $53.30 and June gold traded little changed at $1,252.90. July corn was up 0.7%, July corn was up 0.7%, July soybeans up 0.6%, July Chicago wheat up 0.7% and July Kansas City wheat up 1.2%.

Earlier, Asian stocks settled higher, up 0.12% in Japan’s Nikkei 225, 0.07% in Hong Kong’s Hang Seng, 0.07% in South Korea’s Kospi and 0.03% in China’s Shanghai Composite Index. European shares also traded higher, up 0.35% in Britain’s FTSE 100, 0.14% in Germany’s DAX and 0.51% in France’s CAC 40.

China’s Zhengzhou cotton futures again lost ground and prices were weak on the China National Cotton Exchange. India’s MCX cotton futures and local prices moved lower.

In ICE cotton futures Thursday, July closed lower for the third session in a row for losses totaling 608 points and finished back below its nine-day and 18-day moving averages.

The inverted July-December spread traded from 635 to 514 points and narrowed 11 points to settle at a 560-point July premium on a volume of 4,519 lots. December-March traded between an inverted 36 and 70 points and narrowed 31 points to close at a 40-point December premium on 908 lots.

Cash online grower-to-business and business-to-business trading remained inactive a second day on The Seam.

The Cotlook A Index of world values dropped 115 points to 89.65 cents, leaving the premium over the prior-day July futures settlement unchanged at 9.48 cents.

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent May 19, 2017