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DTN Cotton Open: Climbs to 3-Day High on Export Sales

Ernst Undesser
By Duane Howell DTN Cotton Correspondent November 16, 2017

DTN Cotton Open: Climbs to 3-Day High on Export Sales

U.S. weekly upland export sales jumped to a marketing year high to 506,700 RB, while shipments continued to lag at 94,200 RB. Cash online sales increased to 10,652 bales on The Seam.

Cotton futures climbed to a three-session high in early dealings Thursday, supported by a marketing year high reported by USDA in U.S. weekly export sales.

December hovered up 31 points to 69.12 cents, trading within a 60-point range from 68.90 to 69.50 cents on a contract volume of 2,351 lots. March ticked up 28 points to 69.13 cents, also trading within a 60-point range from 68.89 to 69.49 cents on a turnover of 4,542 lots.

Net U.S. upland export sales for shipment this season jumped to 506,700 running bales during the week ended last Thursday, about 2.5 times the prior week’s 205,300 RB and up from the four-week average of 239,300 RB.

Sales went to 15 countries, headed by Pakistan (290,300 RB), Turkey, Bangladesh, Vietnam and China. Gross sales were 507,100 RB and cancellations were 500 RB. Net sales of 200 RB for next season were reported for Japan.

Upland shipments continued to lag at 94,200 RB, down 24% from the prior week and 4% from the four-week average. Shipments went to 19 countries, led by Vietnam, Mexico, China, Indonesia and South Korea.

Net sales of Pima for this season rose to 18,100 RB, up 35% from the prior week and 9% from the four-week average, while shipments of the extra-long staple cotton hit a marketing year high of 6,400 RB, up 60% and 4%, respectively.

In outside markets, U.S. dollar index futures traded up 0.065 to 93.79, while Dow Jones Industrial Average futures ticked up 70 points and S&P futures 7.50 points amid strong earnings reports from companies.

West Texas Intermediate crude oil dropped 12 cents to $55.21, Brent crude slipped 12 cents to $55.12 and December gold gained $1.60 to $1,279.30. December corn was up 0.07%, January soybeans flat and December Chicago wheat and December Kansas City wheat up 0.54.

Asian stocks closed mostly higher, up 1.47% in Japan’s Nikkei 225, 0.58% in Hong Kong’s Hang Seng, 0.66% in South Korea’s Kospi and down 0.08% in China’s Shanghai Composite Index. India’s Sensex gained 1.06%. European stocks were trading higher, up 0.14% in Britain’s FTSE 100, 0.52% in Germany’s DAX and 0.74% in France’s CAC 40.

China’s Zhengzhou cotton futures finished with small losses and prices settled mostly with losses on the China National Cotton Exchange.

In ICE cotton futures Wednesday, December closed slightly higher, regaining nearly all it lost the prior session and finishing its tag game back above its nine-day and 18-day moving averages and remaining above its 40-day MA.

The December-March switch traded between six points of carry and a five-point inversion and narrowed two points to settle at a three-point May premium on 9,764 lots. March-May traded between 96 and 89 points carry and narrowed three points to close at a 93-point May premium on 2,617 lots. May-July’s settlement difference narrowed five points to a 59-point July premium on 252 lots.

Cash online trading increased to 10,652 bales from 7,349 bales on The Seam. Prices slipped to an average of 65.70 cents from 66.75 cents, reflecting premiums over loan values of 15.46 cents, down from 15.72 cents. Loan values averaged 50.24 cents, down from 51.04 cents. Offerings were 88,217 bales.

Grower-to-business sales rose to 9,317 bales and brought an average price of 66.02 cents, while business-to-business sales dipped to 1,335 bales on prices averaging 63.47 cents. Staples 35 or more accounted for 7,926 bales or 85% of the G2B sales and 1,300 bales or 97% of the B2B sales.

The Cotlook A Index of world values dipped 25 points to 79.35 cents, widening the premium over the prior-day December futures settlement three points to 10.75 cents.

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent November 16, 2017