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DTN Cotton Open: Extends Prior Day’s Strong Gains

Ernst Undesser
By Duane Howell DTN Cotton Correspondent November 21, 2017

DTN Cotton Open: Extends Prior Day’s Strong Gains

©Debra L Ferguson Stock Images

December led the advance ahead of first notice day. U.S. cotton harvest reached 74% completed, up from 66% a year ago and the five-year average of 72%. Cash online sales quickened to 29,988 bales on The Seam.

Cotton futures traded higher on brisk early dealings Tuesday, extending the prior day’s strong gains as December headed the advance.

December hovered up 56 points to 71.93 cents, near the high of its 102-point range from 70.99 to 72.01 cents on a contract volume of 1,505 lots. First notice day is Friday, which will be an abbreviated trading session following the Thanksgiving holiday on Thursday.

Most-active March ticked up 13 points to 70.98 cents, trading within an 83-point range from 70.33 to 71.16 cents on a hefty turnover for this time of day of 7,146 lots.

In outside markets, U.S. dollar index futures traded up 0.015 to 94.010, while Dow Jones Industrial Average futures ticked up 103 points and S&P futures up 8.75 points amid upbeat reports from some retailers.

West Texas Intermediate crude oil gained 23 cents to $56.55, Brent crude dipped 2 cents to $62.20 and December gold slipped $1 to $1,276.30. December corn was down 0.43%, January soybeans 0.2%, December Chicago wheat 0.18% and December Kansas City wheat 0.12%.

Asian stocks closed higher, up 0.7% in Japan’s Nikkei, 1.91% in Hong Kong’s Hang Seng, 0.12% in South Korea’s Kospi and 0.55% in China’s Shanghai Composite Index. India’s Sensex was up 0.36%. European shares were trading higher, up 0.35% in Britain’s FTSE 100, 0.95% in Germany’s DAX and 0.8% in France’s CAC 40.

China’s Zhengzhou cotton futures settled mostly higher and prices ended with gains on the China National Cotton Exchange. India’s S-6 cotton price held steady as arrivals continued to rise.

Meanwhile, U.S. cotton harvesting again advanced at a 10 percentage point clip to reach 74% completed for the week ended Sunday, up from 66% a year ago and the five-year average of 72%, USDA’s progress report showed Monday, up four points and two points, respectively, from a week earlier.

The Texas crop was 67% harvested, up from 55% a week earlier, 46% a year ago and 60% on average. Producers reported high humidity slowed the harvest in the High and Rolling Plains and the Edwards Plateau.

Harvesting also topped the five-year averages by eight points at 78% completed in Georgia, four points at 94% in Missouri, nine points at 84% in North Carolina, 10 points at 82% in South Carolina and a point at 85% in Virginia.

Progress lagged the averages by 12 points at 73% completed in Alabama, a point each at 98% in Arkansas and 97% in Mississippi, 18 points at 75% in California, three points at 60% in Oklahoma and two points at 81% in Tennessee. And it was even at 62% in Arizona and 100% in Louisiana.

In ICE cotton futures Monday, March surged through buy stops and settled at 70.85 cents, just above the midpoint (70.76) of the 963-point range for 2017 from the contract high at 75.57 on March 20 to the July 14 low at 65.94. March closed on a new high finish since Sept. 11.

The inverted December-March switch traded between 27 and 67 points and widened nine points to close at a 52-point December premium on a volume of 6,530 lots. March-May traded between 95 and 55 points of carry and narrowed 18 points to settle at a 76-point May premium on 7,211 lots. May-July’s settlement difference narrowed 17 points to a 36-point July premium.

Cash online trading quickened to 29,988 bales from 24,820 bales on The Seam. Prices averaged 68.84 cents, up from 67.28 cents, reflecting premiums over loan rates of 17.02 cents, up from 15.99 cents. Offerings were 60,189 bales.

Grower-to-business sales of 28,457 bales brought an average price of 68.82 cents, while business-to-business sales of 1,531 cents sold for an average of 69.19 cents a pound. Staples 35 and more accounted for 24,843 of the G2B sales and 1,230 bales of the B2B sales.

The Cotlook A Index of world values gained 25 points to 80.05 cents, widening the premium over the prior-day March futures settlement eight points to 10.70 cents. The index premium over the AWP for the week ending Thursday widened to 18.68 cents.

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent November 21, 2017