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DTN Cotton Close: Finishes Mostly Little Changed

Ernst Undesser
By Duane Howell DTN Cotton Correspondent January 22, 2018

DTN Cotton Close: Finishes Mostly Little Changed

©Debra L Ferguson Stock Images

U.S. classing of 2017-crop upland reached 16.889 million RB, up about 16% from a year ago and around 85% of the RB crop estimate. Grading of Pima climbed to 569,587 RB, up 23% from last year. Futures open interest hit a new all-time high.

Cotton futures settled mostly little changed Monday, unable to sustain momentum in either direction in the most-active contracts after pushing above last week’s highs.

Spot March eased a point to settle at 83.41 cents, just below the midpoint of its 95-point range from up 53 points at 83.95 cents to down 42 points at 83 cents. It traded a tick above Thursday’s high and held on the downswing 64 points above Friday’s inside-range low.

May also closed down a tick, settling at 83.78 cents, and July inched down four points to settle at 84.19 cents. New-crop December finished unchanged at 75.75 cents. The other contracts settled down 24 points to up six points.

Volume slowed to an estimated 27,200 lots from 34,201 lots the prior session when spreads accounted for 17,063 lots or 50%, EFS 1,022 lots and EFP 292 lots. Options volume declined to 14,550 lots (8,945 calls and 5,605 puts) from 20,227 lots (11,061 calls and 9,166 puts).

On the U.S. crop scene, upland classing slowed to 598,507 running bales last week from 662,791 RB the prior week, bringing the season’s total to 16.889 million RB, according to the latest weekly report by USDA’s Agricultural Marketing Service.

Classing of 2017-crop upland was up about 16% from 14.575 million RB graded a year ago and amounted to about 85% of USDA’s January production estimate. Last year, around 91% of the final output had been classed.

ins submitting samples dipped to 285 from 308 the prior week and 533 for the season. Tenderable cotton totaled 49.8% for the week and 70.3% for the season, compared with 67% and 70.9%, respectively, last year.

Classing facilities at Abilene, Tex., Corpus Christi, Lamesa and Lubbock graded a total of 475,425 RB for the week, 79% of the week’s U.S. upland classing run. The regional total for the season rose to 7.973 million RB, about 76% of the upland crop estimate for the Southwest.

Pima classing of samples submitted by 14 gins slowed to 27,698 RB from the prior week’s 39,770 RB. The extra-long staple count for the season reached 569,587 RB, up 23% from 461,640 RB a year ago.

Dry conditions persisted in the Texas Plains where some fires erupted at gins during periods when winds gusted as high as around 50 miles per hour, AMS reported in a weekly review. Some fields hadn’t been harvested and were under evaluation by insurance adjusters.

High winds caused some delays in ginning. More than 20 gins have finalized operations for the season. Some gins have worked together processing modules to help finish the season.

Light snow fell in some areas of the Rio Grande Valley. Ginning was completed in South Texas and the Winter Garden and continued in the northern Blackland Prairies and in Kansas and Oklahoma. There were reports that ginning may continue into May and possibly June in Oklahoma owing to the exceptional size and yield of the crop.

Futures open interest expanded 3,797 lots to a new all-time high of 312,523 on Friday, with March’s up 92 lots to 169,881 and May’s up 1,528 lots to 70,798. Open interest broke the old record — 302,683 lots set on March 3, 2008 — last week.

Certificated stocks increased 384 bales to 48,451. There were 440 bales awaiting review. The additions and the withdrawals were at Galveston where deliverable stocks were 23,182 bales.

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Ernst Undesser
By Duane Howell DTN Cotton Correspondent January 22, 2018