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DTN Cotton Open: Ticks Marginally Lower

Ernst Undesser
By Duane Howell DTN Cotton Correspondent December 7, 2017

DTN Cotton Open: Ticks Marginally Lower

U.S. upland weekly export sales fell to 186,600 RB and shipments hit a marketing year high at 246,800 RB. Upland cancellations of 57,300 RB were reported for 2017-18, including 39,700 RB for China. Cash online sales quickened to 22,987 bales on The Seam, largest since Nov. 20.

Cotton futures traded marginally lower in early dealings Thursday after U.S. weekly export sales came in within the range of general expectations.

Spot March eased off five points to 72.67 cents, trading within an 83-point range between 72.10 and 72.93 cents on a contract volume of 4,757 lots. May inched down six points to 73.33 cents, trading within a 79-point range between 72.78 and 73.57 cents on a turnover of 1,205 lots.

Net export sales for shipment this season of 186,600 running bales fell 33% from the previous week and 45% from the four-week average, USDA reported. Sales went to 18 countries, headed by Pakistan, Vietnam, Turkey and Japan. Gross sales were 243,900 RB and cancellations were 57,300 RB, including 39,799 for China.

Net sales for delivery next season of 50,400 RB, down from 52,800 the prior week, were primarily for Vietnam, China, Indonesia, Thailand and South Korea.

Upland shipments climbed to a marketing year high to 246,800 RB, up from 112,200 the prior week and the four-week average of 104,100 RB. Shipments headed to 23 countries, led by Vietnam, China, Indonesia, Thailand and South Korea.

Net commitment reductions for Pima of 12,800 RB for this season resulted from cancellations of 48,500 RB exceeding new sales of 35,700 RB. Cancellations included 22,800 RB for India. For next season, net sales of 15,700 RB were reported for India.

Shipments of the extra-long staple cotton also hit a marketing year high on a jump to 23,500 RB, up 59% from the previous week and “up noticeably” from the four-week average.

In outside markets, U.S. dollar index futures traded down 0.050 or 0.06% to 93.630, while Dow Jones Industrial Average futures ticked down 70 points and S&P futures down 2.25 points.

West Texas Intermediate crude oil gained 24 cents to $56.20, Brent crude added 46 cents to $61.68 and February gold dropped $9.40 to $1,256.70. March corn was down 0.14%, January soybeans down 0.8%., March Chicago wheat down 0.35% and March Kansas City wheat down 0.06%.

Asian stocks closed mostly higher, up 1.45% in Japan’s Nikkei 225, up 0.28% in Hong Kong’s Hang Seng, down 0.5% in South Korea’s Kospi and down 0.29% in China’s Shanghai Composite Index. India’s Sensex gained 1.08%. European shares were trading slightly higher, up 0.01% in Britain’s FTSE 100, 0.15% in Germany’s DAX and 0.01% in France’s CAC 40.

China’s Zhengzhou cotton futures closed mostly lower and prices eded mixed on the China National Cotton Exchange. India’s MCX cotton futures were lower again.

In ICE cotton futures Wednesday, March settled on a slight loss, trading within last Wednesday’s 171-point range for the fifth consecutive session and closing just above the midpoint of that span.

The March-May spread traded between 80 and 60 points of carry and narrowed nine points to close at a 67-point May premium on a volume of 2,513 lots. May-July traded between 43 and 33 points carry and narrowed three points to settle at a 41-point May premium on 698 lots.

Cash online sales quickened to 22,987 bales from 13,670 bales on The Seam, largest daily turnover since Nov. 20. Prices averaged 69.26 cents, down slightly from 69.46 cents. Premiums over loan rates rose to an average of 18.45 cents from 18.16 cents. Loan values averaged 50.81 cents, down from 51.30 cents. Offerings were 90,462 bales.

Grower-to-business sales increased to 14,950 bales on prices averaging 69.46 cents per pound, while 8,037 bales changed hands on the business-to-business platform for an average price of 68.88 cents. Staples 35 or more accounted for 11,795 bales or 79% of the grower sales and 7,363 bales or 92% of the business sales. All the cotton was from the Southwest.

The basis on the base quality firmed 25 points earlier this week in the Southeast to 100 points “on” March futures.

The Cotlook A Index of world values was unchanged at 82.95 cents, widening the premium over the prior-day March futures settlement seven points to 10.44 cents. (This corrects a misprint in the A Index figure here Wednesday.)

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent December 7, 2017