DTN Cotton Open: Ticks Modestly Higher in Early Trade

Texas cotton field ready for harvest. Photo: Justin Chopelas

December and March traded above prior-session highs. Trader-commitments reports delayed. Cash online cotton sales slowed to 4,735 bales.

Cotton futures ticked modestly in the green in the early going Monday, with December and March trading above the prior-session highs.

December ticked up 34 points to 69.38 cents, just off the high of its tight 46-point range from 68.99 to 69.45 cents following the expiration of December options on Friday. March traded up 26 points to 69.37 cents, a tick below December and also near the high of its 47-point range from 68.95 to 69.42 cents on a turnover of 3,554 lots.

In outside markets, U.S. dollar index futures traded up 0.125 to 94.405, while Dow Jones Industrial Average futures dropped 81 points and S&P futures 7.25 points. Uncertainty over tax reform in Congress weighed on stock market sentiment after the Dow and S&P indexes ended the week lower Friday for the first time in nine weeks.

Crude oil futures gained 8 cents to $56.82, Brent crude dipped 3 cents to $63.549 and December gold rose by $3.40 to $1,277.60. December corn was down 0.36%, January soybeans 0.32%, December Chicago wheat 1.22% and December Kansas City wheat 1.15%.

Asian stocks closed mixed, down 1.42% in Japan’s Nikkei 225, up 0.21% in Hong Kong’s Hang Seng, down 0.5% in South Korea’s Kospi and up 0.47% in China’s Shanghai up 0.47% in China’s Shanghai Composite Index. European shares were trading lower, down 0.2% in Britain’s FTSE 100, 0.85% in Germany’s DAX and 0.93% in France’s CAC 40.

Meanwhile, the commitment of traders reports, normally released on Fridays by the Commodity Futures Trading Commission, and some weekly USDA cotton reports were delayed by the observance of Veterans Day.

In ICE cotton futures Friday, December settled on a moderate gain for the day and slight weekly gain, trading inside the prior-day range. It slipped below the prior week’s low on Tuesday, rallied above that week’s high on Thursday prior to USDA’s monthly supply-demand report and closed the week back above its nine-day, 18-day and 40-day moving averages.

The December-March spread traded between 33 points of carry and a four-point inversion and narrowed 16 points to settle at a nine-point March premium on a volume of 11,571 lots. March-May traded between 105 and 93 points carry and narrowed six points to close at a 94-point May premium on 3,034 lots. May-July’s settlement difference narrowed 12 points to a 49-point July premium on 710 lots.

Cash online sales slowed to 4,735 bales from 9,663 bales on The Seam. Prices dipped to an average of 68.24 cents from 68.40 cents, reflecting average premiums over loan values of 16.55 cents, up from 16.43 cents. Loan values averaged 51.69 cents, down from 51.97 cents. Offerings were 56,840 bales.

Grower-to-business sales totaled 3,586 bales on an average price of 68.58 cents, while business sales totaled 1,146 bales and brought an average of 67.18 cents per pound. Staples 35 and longer made up 3,549 bales of the G2B sales and all but three bales of the B2B sales.

The Cotlook A Index of world values dropped 25 points to 79.35 cents, widening the premium over the prior-day December futures settlement nine points to 11.06 cents. The index premium over the adjusted world price for the marketing week ending Thursday narrowed 58 points to 17.97 cents.

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