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DTN Cotton Close: Settles Higher in 2017-Crop Contracts

Ernst Undesser
By Duane Howell DTN Cotton Correspondent November 28, 2017

DTN Cotton Close: Settles Higher in 2017-Crop Contracts

March settled on its highest close since Sept. 8. Non-commercials boosted net longs in cotton futures only by 8,020 lots. Wind advisory issued on Texas Plains. U.S. 2017-crop upland loans outstanding rose to 2.338 million RB.

Cotton futures closed up 44 to 190 points in 2017-crop deliveries, led by maturing December, and finished mostly on slight losses in contracts beyond July 2018 in slowed trading on Tuesday.

Most-active March gained 72 points to settle at 72.14 cents, a new high close since Sept. 8 and near the high of its 127-point range from down 40 points at 71.02 to up 87 points at 72.29 cents. It had fallen below the prior-session low for the first time in eight sessions.

December closed at 74.05 cents, settling outside the session’s 194-point trading range from 72 to 73.94 cents, a new high intraday print since Sept. 11. Its open interest coming into the session was 443 lots, down 117 lots.

Volume slowed to an estimated 26,699 lots from 33,033 lots the previous session when spreads accounted for 12,973 lots or 39% and EFS 358 lots. Options volume declined to 4,090 lots (3,107 calls and 983 puts) from 7,468 lots (4,962 calls and 2,506 puts).

Noncommercial traders boosted their net longs in cotton futures only by 8,020 lots to 59,163 during the week ended last Tuesday, according to delayed data reported by the Commodity Futures Trading Commission after the close Monday.

Those traders increased their net longs by 3.8 percentage points to 26.4% of the futures open interest, which declined 2,396 lots to 224,240. They added 6,899 longs and covered 1,121 shorts. Non-reportable traders raised their net longs 1,949 lots to 3,094, covering 2,125 shorts and liquidating 176 longs.

Commercials sold 9,969 lots, liquidating 7,028 longs and adding 2,941 shorts to raise their net shorts to 62,257 lots.

On the weather front, winds of 25 to 35 miles per hour with gusts to 50 mph were forecast across the northwestern Texas High Plains and parts of the southern Plains from late Tuesday morning through early Tuesday evening behind a cold front.

Elevated fire conditions were forecast in much of the area owing to strong winds, warm temperatures and dry air. Patchy blowing dust was expected in the Lubbock area. No rain is foreseen into early next week.

Meanwhile, U.S. 2017-crop upland loans outstanding rose by 395,224 running bales to 2.338 million RB during the week ended Nov. 20, according to the latest USDA figures.

Entries were 691,427 RB and repayments were made on 296,203 RB. Upland cotton under loan included 213,809 RB of Form A issued to individual growers and 2.124 million RB of Form G loans issued to marketing cooperatives or loan servicing agents.

Futures open interest increased 1,168 lots to 234,499 on Monday, with March’s up 952 lots to 162,516 and May’s down 62 lots to 37,751. Certified stocks remained at 47,951 bales, unchanged since Nov. 17.

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent November 28, 2017