DTN Cotton Open: Off to Higher Early Start

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Cotton contracts were moderately higher early, led by gains in the May. It also helps cotton that most other commodities are also starting higher Thursday while the U.S. dollar index is down 0.18.

General Comments: July cotton was starting modestly higher Thursday, continuing this week’s climb back toward its highest spot prices in nearly three years with help from early commercial buying.

USDA said early Thursday that last week’s export sales and shipments of cotton totaled 226,300 and 358,700 running bales respectively, both lower than the previous week, but enough to keep actual upland shipments up 77% in 2016-17 from a year ago. Last week’s top cotton buyers were China, Turkey, and Vietnam — all familiar customers this year.

Top export destinations were the same three, but in the order of Vietnam, China, and Turkey. This week’s export totals continue to suggest that USDA will likely hike its export estimate again, possibly as soon as USDA’s May 10 WASDE report.

In spite of USDA’s estimate that U.S. cotton acres will increase 21% in 2017, December cotton prices are also slightly higher while the early planting pace remains close to its usual schedule.

DTN’s seven-day forecast expects heavy rains from Oklahoma to the mid-Atlantic states, but only lighter amounts everywhere else — mostly favorable for planting progress.

OUTSIDE MARKETS: The Dow Jones Industrial Average closed down 118.79 points at 20,404.49. The NASDAQ Composite was up 13.56 points at 5,863.03 and the S&P 500 was down 4.02 points at 2,338.17 Wednesday. DJIA futures were 39 points higher overnight.

Asian markets were mixed with Japan’s Nikkei down 1.71 points (-0.01%) and China’s Shanghai Composite up 1.41 points (0.04%). European markets were also mixed with London’s FTSE 100 down 4.25 points (-0.06%), Germany’s DAX down 6.08 points (-0.05%), and France’s CAC 40 up 34.25 points (0.68%).

The U.S. dollar index was 0.18 lower at 99.63. Crude oil was up $0.14 at $50.99 while Brent crude gained $0.21 at $53.14. June gold was $2.10 lower at $1,281.30.



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