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DTN Cotton Open: Hovers Close to Flat Line

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

DTN Cotton Open: Hovers Close to Flat Line

Cooler temperatures and rainy period expected with the onset of fall on the Texas High Plains. Cash online trading resumed on business-to-business sales of 888 bales.

Cotton futures inched mostly close to the flat line early Friday, with December positioned for its second straight losing week.

December hovered up five points to 68.30 cents, trading within a 53-point range between 68.11 and 68.64 cents on a contract volume of 2,847 lots. It finished last Friday at 69.07 cents.

March edged up 11 points to 67.69 cents, trading within a 42-point range between 67.45 and 67.87 cents on a turnover of 853 lots. October had traded between 68.96 and 69.25 cents on its last trading day before first notice day.

In outside markets, U.S. dollar index futures ticked down 0.285 to 91.765, while Dow Jones futures dipped 33 points and S&P futures five points. Crude oil dropped 7 cents to $50.48, Brent Crude tricked up 11 cents to $56.54 and December gold fell $3 to $1,297.80. December corn was up 0.57%, November soybeans 0.77%, December Chicago wheat 0.33% and December Kansas City wheat up 0.5%.

Asian stocks closed lower, down 0.25% in Japan’s Nikkei 225, 0.82% in Hong Kong’s Hang Seng, 0.74% in South Korea’s Kospi and 0.15% in China’s Shanghai Composite Index. European stocks were trading higher on upbeat economic data. Britain’s FTSE gained 0.18%, Germany’s DAX 0.21% and France’s CAC 40 0.32%.

China’s Zhengzhou cotton futures settled mixed and prices closed lower on the China National Cotton Exchange.

On the weather scene, this first day of fall will bring slightly lower temperatures on the Texas High Plains, with a pattern supportive of heavy rain expected to develop this weekend and especially into next week.

Temperatures in the Lubbock area are expected to remain warm Friday, topping out in the upper 80s to middle 90s and diminishing to the low to upper 70s next week. Rain chances are rated at 50% Saturday, 60% Sunday and 70% Monday, with chances lingering through at least Thursday.

In ICE cotton futures Thursday, December closed at its lowest finish since Aug. 25. Its declining nine-day moving average crossed below the 40-day MA, which turned downward.

The inverted December-March spread traded between 51 and 94 points and narrowed seven points to settle at a 67-point December premium on a volume of 2,568 lots. March-May traded between 61 and 47 points carry and widened seven points to close at a 59-point May premium on 534 lots. May-July widened five points to a 52-point settlement premium on July.

Cash online trading, inactive the prior session, totaled 888 bales on The Seam on prices averaging 65.22 cents. Premiums averaged 16.02 cents over loan values of 49.20 cents. All the sales were on the business-to-business exchange and included 682 bales of staples 35 or more. Offerings were 6,963 bales.

The basis on the base quality firmed 50 points to 25 points off December in East Texas-Oklahoma and to 50 points off in West Texas.

The Cotlook A Index of world values gained 15 points to 79.50 cents, widening the premium over the prior-day December futures settlement 17 points to 10.25 cents.

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