DTN Cotton Open: Heads for 7th Weekly Gain in Row

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U.S. employers hired at a healthy rate in November and the unemployment rate held at 4.1%. Cash online cotton sales increased to 23,591 bales on The Seam.

Cotton futures ticked slightly lower in early dealings Friday, with spot March still positioned for its seventh weekly gain in a row.

March hovered off 23 points to 74 cents, around the middle of its tight 35-point range between 73.86 and 74.21 cents between 73.86 and 74.21 cents on a contract volume of 3,339 lots. It closed last Friday at 73.28 cents. May dipped 20 points to 74.44 cents, trading within a 38-point range between 74.30 and 74.68 cents on a turnover of 1,210 lots.

In the news, U.S. employers hired workers at a strong rate in November and the unemployment rate held at a 17-year low, signs the economy is on its firmest footing in at least a decade, Dow Jones Newswires reported.

Nonfarm payrolls rose a seasonally adjusted 228,000 in November, the Labor Department said. The gain was stronger than the pace recorded this year through August before hurricanes caused a sharp pullback in September followed by a rebound in August. Revised figures showed employers added 38,000 jobs in September and 244,000 in October for a net upward revision of 3,000.

The unemployment rate remained at 4.1% last month, matching the lowest level since December 2000. Economists surveyed by The Wall Street Journal had expected 195,000 new jobs and a 4.1% unemployment rate last month.

In outside markets, U.S. dollar index futures ticked up 0.075 or 0.08%, while Dow Jones Industrial Average futures gained 71 points and S&P futures 8.75 points following the monthly jobs report.

West Texas Intermediate crude oil gained 91 cents to $57.60, Brent crude added $1.06 to 63.20 and February gold dropped $2.70 to $1,250.40. March corn was up 0.57%, January soybeans up 0.2% and March Chicago wheat and March Kansas City wheat up 0.22%.

Globally, Asian stocks closed mostly higher, up 1.39% in Japan’s Nikkei 225, 1.19% in Hong Kong’s Hang Seng, 0.08% in South Korea’s Kospi and down 0.67% in China’s Shanghai Composite Index. India’s Sensex gained 0.91%. European stocks also were trading higher, up 0.55% in Britain’s FTSE 100, 1.02% in Germany’s DAX and 0.34% in France’s CAC 40.

China’s Zhengzhou cotton futures closed with gains and prices settled higher on the China National Cotton Exchange. India’s MCX cotton futures rose strongly and S-6 prices were firm.

In ICE cotton futures Thursday, March rallied from a six-session low to within 90 points of filling the 245-point chart gap left by the expiration of the December contract. It posted its highest close since early May and 134 points from its contract high set March 20.

The March-May spread traded between 74 and 35 points carry and narrowed 26 points to close at a 41-point May premium on a volume of 4,777 lots. May-July traded from 45 to 10 points of carry and narrowed 23 points to settle at an 18-point July premium on 1,354 lots.

Cash online sales increased to 23,591 bales from 22,987 bales on The Seam. Prices rose to an average of 69.90 cents, reflecting gains to an average of 18.92 cents from 18.45 cents in premiums over loan values. Offerings were 87,937 bales.

Grower-to-business sales increased to 19,842 bales from 16,554 bales on an average price of 69.86 cents, while business-to-business sales slipped to 3,749 bales on prices averaging 70.13 cents.

The Cotlook A Index of world values gained 25 points to 83.20 cents, widening the premium over the prior-day March futures settlement four points to 1048 cents.

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