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DTN Cotton Open: Ticks Quietly on Mostly Slight Gains

Ernst Undesser
By Duane Howell DTN Cotton Correspondent September 20, 2017

DTN Cotton Open: Ticks Quietly on Mostly Slight Gains

Texas A&M AgriLife Extension Service photo by Kathleen Phillips

Fed policy statement on its two-day policy meeting set for later in the day. Hurricane Maria slammed into Puerto Rico. Cash online sales declined to 492 bales on The Seam.

Cotton futures ticked on mostly slight gains in quiet early dealings Wednesday ahead of a Federal Reserve announcement later in the day on results of its two-day policy meeting.

December edged up 12 points to 69.39 cents, trading within a 48-point range between 69.25 and 69.73 cents on a contract volume of 1,813 lots. March ticked up 15 points to 68.45 cents, trading within a 42-point range between 68.29 and 68.71 cents on 341 lots. Thin October, where first notice day is Monday, was up 111 points at 71.09 on a traded nine lots.

Since December’s limit-down finish on the Sept. 12 supply-demand report, its closing range has spanned a mere 43 points, from 69.07 to 69.50 cents, within its overall 164-point range from 68.31 to 69.95 cents.

The Fed policy statement is due at 1 p.m. CDT. It generally is expected to leave interest rates unchanged and stick to plans to raise rates in December. Traders also will be watching for plans for the central bank to begin shrinking its $4.2 trillion stockpile of bonds.

Traders continued tracking Hurricane Maria, which slammed into Puerto Rico Wednesday as a Category 4 storm, the most powerful to hit the island since 1932. Forecasters said it was too early to say whether it would threaten the U.S. east coast.

In outside markets, U.S. dollar index futures edged up 0.20 to 91.58, while Dow Jones futures ticked down five points and S&P futures up 0.75 point. Crude oil gained 48 cents to $49.96, Brent crude added 52 cents to $55.66 and December gold gained $4.30 to $1,314.90. December corn was up 0.22%, November soybeans 0.36%, December Chicago wheat 0.34% and December Kansas City wheat 0.4%.

Asian stocks closed mostly higher, up 0.05% in Japan’s Nikkei 225, 0.27% in Hong Kong’s Hang Seng and 0.28% in China’s Shanghai Composite Index but down 0.16% in South Korea’s Kospi. European shares traded narrowly mixed, down 0.03% in Britain’s FTSE 100 and 0.12 in Germany’s DAX and up 0.1% in France’s CAC 40.

China’s Zhengzhou cotton futures settled with triple-digit gains and prices continued to rise on the China National Cotton Exchange. India’s MCX cotton futures continued to weaken.

In the market Tuesday, December settled modestly lower on a light-volume, inside-range day and closed right back below its rising 50-day moving average.

The inverted December-March spread traded between 56 and 106 points and widened 37 points to settle at a 97-point December premium on a volume of 1,483 lots. March-May traded between 51 and 43 points carry and widened six points to close at 47 points on 207 lots. May-July widened 10 points to a 46-point settlement premium on July on 80 lots.

In cash online trading, sales slipped to 492 bales from 819 bales on The Seam. Prices rose to an average of 68.27 cents from 65.35 cents, reflecting premiums of 15.64 cents over loan values.

Included were 386 bales of grower-to-business sales and 106 bales of business-to-business sales. Prices averaged 69.93 cents on the G2B sales and 62.23 cents on the B2B sales. Staples 35 or more accounted for all the G2B sales and 99 bales of the B2B sales.

The Cotlook A Index of world values gained 80 points to 79.80 cents, widening the premium over the prior-day December futures settlement 37 points to 10.20 cents.

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent September 20, 2017