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DTN Cotton Close: Finishes on 11 Day High

Ernst Undesser
By Duane Howell DTN Cotton Correspondent August 22, 2017

DTN Cotton Close: Finishes on 11 Day High

Texas A&M AgriLife photo by Dr. Jourdan Bell

Traders eyed Tropical Disturbance Harvey tracking toward the Texas coast. More rain and cooler temperatures expected in the Texas Plains. Many growers in the Plains and Delta would like some hot, dry weather.

Cotton futures settled up five to 25 points across the board Tuesday, led by December, which had established the day’s range by early morning.

December settled at 67.81 cents, its highest close since Aug. 11, the day after it had finished limit down on USDA’s August crop and supply-demand forecasts. It traded within a 59-point range, from down 21 points at 67.35 cents to up 38 points at 67.94 cents.

March edged up 16 points to close at 67.46 cents, trading within a 57-point range from 67.09 to 67.66 cents. October settled up 17 points to 68.88 cents.

U.S. dollar index futures, the Dow Jones industrial average and the S&P 500 all were trading higher. December corn closed down 0.83%, November soybeans up 0.13%, December Chicago wheat down 1.72% and December Kansas City wheat down 2.18%. September West Texas Intermediate crude oil closed up 27 cents or 0.57% to $47.64.

Volume was estimated at 13,256 lots, up from 12,233 lots the prior session when spreads accounted for 4,436 lots or 36%, EFP 183 lots and EFS one lot. (Cleared volume for Monday came in above the reported estimate.) Options volume increased to 6,093 lots (3,739 calls and 2,354 puts) from 1,380 lots (593 calls and 787 puts).

Traders eyed Tropical Disturbance Harvey tracking toward the Texas coast and the active cotton harvesting areas of South Texas.

Isolated thunderstorms are forecast Tuesday and Wednesday in the Corpus Christi area, with rain chances jumping to 60% Thursday night and rising to 70% Friday and Saturday, then 50% Sunday and 40% Monday. Depending on Harvey’s eventual track and development, impacts from the system could include locally heavy rain and possible flooding.

Producers are harvesting a high-yielding crop of outstanding quality in South Texas, traditional source of the nation’s first new-crop supplies, and of course don’t want rains on open bolls.

Statewide, open bolls totaled 14% as of Sunday, three percentage points behind last year and two points behind the five-year average, USDA’s weekly crop progress report showed. Nine percent had been harvested, compared with 4% a year ago and the five-year average.

On the other end of Texas, thunderstorms are expected to form along a cold front Tuesday afternoon and evening in the High and Rolling Plains. Some of the storms could become strong to severe with marginally severe hail and damaging downburst winds, forecasters say.

Chances for showers and thunderstorms in the Lubbock area are rated at 50% Tuesday night, diminishing to mostly 20% to 30% the next two days with chances then lingering into early next week.

Many producers who have received ample August rainfall — some have shut off irrigation wells — now would like to see hot, dry weather to facilitate crop maturity.

High temperatures into early next week are forecast only in the low to middle 80s following an expected 89-degree high on Tuesday. Lows are forecast in the middle to upper 60s. The normal high-low is 91 and 66.

Elsewhere, many Delta producers also would like some hot, dry weather. Cotton extension specialists have reported some concern about boll retention in the North Delta owing to recent wet, cloudy conditions. Similar concern was reported in the South Delta last week.

Futures open interest grew 1,015 lots Monday to 225,345, with December’s up 161 lots to 147,768 and March’s up 694 lots to 53,872. Certified stocks declined 463 bales to 13,520.

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent August 22, 2017