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DTN Cotton Open: Ticks on Marginal Gains in Early Going

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

DTN Cotton Open: Ticks on Marginal Gains in Early Going

©Debra L Ferguson Stock Images

U.S. weekly upland export sales came in at a healthy 253,200 RB, while shipments fell to a marketing year low of 86,100 RB. China reported slightly slower economic growth. Cash online sales slowed to 389 bales on The Seam.

Cotton futures ticked on marginal gains in the early going Thursday, trading within tiny ranges on the heels of a USDA report showing healthy weekly U.S. export sales and a marketing year low in shipments.

December eked up seven points to 67.70 cents, confined to a mere 25-point range from 67.63 to 67.88 cents on a contract volume of 1,382 lots. March was up eight points, trading also within a 25-point span between 67.25 and 67.50 cents on a turnover of 614 lots.

Net upland export sales for shipment this season of 253,200 running bales rose by 64% from the previous week and 39% from the prior four-week average. The sales beat some expectations of 125,000 to 175,000 RB.

Sales went to 18 countries, led by Vietnam, Bangladesh, Turkey, China and Thailand. Gross sales were 256,300 RB and cancelations were 3,100 RB. Net sales for next season 8,800 RB dipped from 9,300 the prior week. These were for China.

Pima sales of 17,500 RB for this season fell 20% from the prior week and 41% from the four-week average, while shipments of the extra-long staple cotton of 5,700 RB were up 34% and 10%, respectively.

Upland shipments fell to 86,100 RB, down 27% from the prior week and 41% from the four-week average. Shipments went to 17 countries, headed by Vietnam, China, Indonesia and South Korea.

In outside markets, U.S. dollar index futures traded down 0.155 to 93.075, Dow Jones Industrial Average futures ticked down 90 points and S&P futures down 10.25 points. Crude oil lost 75 cents to $51.29, Brent crude shed 94 cents to $57.21 and December gold gained $3.90 to $1,286.90. December corn was up 0.36%, November soybeans up 0.1%, December Chicago wheat up 0.29% and December Kansas City wheat up 0.41%.

Global stock markets mostly fell on the 30th anniversary of Black Monday. Asian stocks closed up 0.4% in Japan’s Nikkei 225, down 1.92% in Hong Kong’s Hang Seng, down 0.4% in South Korea’s Kospi and down 0.35% in China’s Shanghai Composite Index. European shares were trading lower, down 0.47% in Britain’s FTSE 100, 0.82% in Germany’s DAX and 0.61% in France’s CAC 40.

China’s Zhengzhou cotton futures closed on triple-digit losses and prices settled on mostly losses on the China National Cotton Exchange. India’s MCX cotton futures were lower in light trading.

In world news, China’s gross domestic product was up 6.8% in the third quarter from a year earlier, slowing from the second quarter’s 6.9% pace as Beijing’s clampdown on off-balance-sheet lending and corporate leverage weighed on growth.

In ICE cotton futures Wednesday, December traded listlessly within the previous-session range and settled with a fractional loss. Its 63-point trading range was the tightest daily price span since Aug. 22.

The inverted December-March spread traded between 24 and 37 points and widened a point to settle at a 30-point December premium on a volume of 3,508. March-May traded from 96 to 80 points carry and widened 11 points to close on a 95-point May premium on 743 lots. May-July’s settlement difference widened three points to a 67-point July premium on 312 lots.

Cash online sales slowed to 389 bales from 656 bales on The Seam. Prices fell to an average of 62.93 cents from 65.94 cents, with premiums over loan repayment rates falling to 12.95 cents from 15.42 cents. Loan values on the turnover averaged 49.98 cents, down from 50.53 cents.

Grower-to-business sales totaled 80 bales on prices averaging 61 cents, while 309 bales changed hands on the business-to-business platform on an average price of 63.42 cents. Staples 35 or more accounted for 65 bales of the grower sales and 265 bales of the business sales.

The Cotlook A Index of world values gained 15 points to 77.85 cents, narrowing the premium over the prior-day December futures settlement nine points to 10.08 cents. The premium over this marketing week’s adjusted world price narrowed to 17.41 cents.

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