DTN Cotton Open: Trades Quietly Mixed Within Tight Ranges

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December ekes out small gain, still positioned for weekly loss. U.S. retail sales fell unexpectedly in June and inflation was flat.

Cotton futures traded quietly mixed within tight ranges early Friday, with December clinging to a small gain and positioned for a weekly loss.

December edged up nine points to 66.46 cents, trading within a 44-point range between 66.31 and 66.75 cents on a contract volume of 1,849 lots. It settled last Friday at 68.59 cents, exactly where it closed the week before. March eased five points to 66.11 cents, trading within a 47-point span between 66.04 and 66.51 cents on a turnover of 377 lots.

In the news, spending at U.S. retailers declined in June for the second straight month, Dow Jones Newswires reported, while inflation remained flat.

Retail sales — a measure of consumer spending at stores, restaurants and websites — decreased a seasonally adjusted 0.2% in June from the prior month, the Commerce Department said. Economists surveyed by The Wall Street Journal had expected a 0.1% rise.

Retail sales had declined a revised 0.1% in May. It was the first back-to-back sales drop since July and August 2016. Excluding autos, sales were down 0.2% last month. Exclusive of autos and gasoline, sales fell 0.1% in June, the first decline for that measure in nearly a year.

The consumer-price index, which measures what Americans pay for everything from ice cream to eye-doctor visits, was unchanged in June from the prior month, the Labor Department said. Excluding the often volatile categories of food and energy, so-called core prices rose 0.1%.

Economists had expected overall prices to advance 0.1% and core prices to gain 0.2% on the month. From a year earlier, consumer prices climbed only 1.6%, marking the fourth straight month annual gains have eased. Prices were up 1.7% on the year when excluding food and energy.

In outside markets, U.S. dollar index futures ticked down 0.485 to 95.025, while Dow Jones futures and S&P futures posted slight gains. Crude oil edged up 9 cents to $46.17 and Brent crude added 2 cents to $48.44. August gold gained $1.40 to $1,231.30. December corn was up 1.31%, November soybeans up 0.71%, September Chicago wheat up 0.93% and September Kansas City wheat up 0.82%.

Earlier, Asian stocks closed higher, up 0.09% in Japan’s Nikkei 225, 0.16% in Hong Kong’s Hang Seng, 0.21% in South Korea’s Kospi and 0.13% in China’s Shanghai Composite Index. European shares traded narrowly mixed, down 0.3% in Britain’s FTSE 100, up 0.04% in Germany’s DAX and 0.1% in France’s CAC 40.

China’s Zhengzhou cotton futures finished mostly with big losses and prices lost ground on the China National Cotton Exchange.

In ICE cotton futures Thursday, December finished on a new low close for the move after posting the lowest intraday low since the June 26 low at 66.15, lowest since Aug. 31.

The inverted December-March spread traded between 20 and 43 points and narrowed 12 points to settle at a 21-point December premium on a volume of 2,319 lots. March-May traded between 59 and 42 points carry and widened 12 points to close at a 59-point May premium on 457 lots.

World values as measured by the Cotlook A Index and Forward A Index fell 50 points to 83.20 and 30 points to 77.65 cents, respectively, narrowing the 2016-17 premium 20 points to 5.55 cents.

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