DTN Cotton Open: Surges to New Highs on Heavy Early Volume

U.S. weekly upland export sales came in at a strong 274,500 RB and upland shipments hit a marketing year high of 281,600 RB. Cash online sales increased to 35,761 bales, including grower sales of 23,823 bales.

Cotton futures hit new contract highs on heavy early dealings Thursday and added to the gains on the heels of another strong U.S. weekly export sales report.

Spot March hovered up 163 points to 81.28 cents, just off the high of its 194-point range from 79.42 to 81.36 cents on a contract volume of 8,687 lots. May gained 141 points to 81.34 cents, also near the high of its 168-point range from 79.73 to 81.41 cents.

Net all-cotton export sales for shipment this season of 274,500 running bales during the holiday-marked week ended last Thursday rose 42% from the previous week and 16% from the prior four-week average, USDA reported.

Sales went to 15 destinations, led by India, Turkey, Mexico, Vietnam and China. Gross sales were 281,100 RB and cancellations were 6,600 RB. Commitment reductions were reported for South Korea and Japan. Sales of 92,900 RB were reported for shipment next season to bring the total for both crop years to 364,400 RB, up from 292,600 RB the week before. New-crop buyers included Mexico, China and Japan.

Upland shipments quickened to a marketing year high of 281,600 RB, up 35% from the previous week and 41% from the four-week average. Shipments went to 23 countries, headed by Vietnam, China, Turkey, Indonesia and Pakistan.

Net Pima sales for this season of 6,700 RB climbed 20% from the prior week but were down 33% from the four-week average, while shipments of the extra-long staple cotton of 8,500 RB dropped 18% and 43%, respectively.

 

China’s Zhengzhou cotton futures closed mostly higher. India’s crop prices and arrivals reached season highs and MCX cotton futures rose again.

In ICE cotton futures Wednesday, March settled on a triple-digit gain on a new contract high finish, falling at the intraday high 12 points shy of its life-of-contract high of 80.05 cents set on a downside reversal on Friday. It closed back above its nine-day moving average.

The March-May spread traded between 35 and 20 points of carry and narrowed three points to settle at a 31-point May premium on a volume of 6,927 lots. May-July traded between 33 and 11 points carry and narrowed 15 points to close at a 19-point July premium on 2,815 lots.

Cash online sales increased to 35,761 bales from 23,823 bales on The Seam, largest one-day volume since Dec. 15. Prices averaged 69.56 cents, down from 70.45 cents, reflecting an unchanged average of 20.74 cents over loan repayment rates. Loan values dipped to an average of 48.82 cents from 49.70 cents. Offerings were 130,396 bales.

Grower-to-business sales rose to 32,453 bales and brought an average price of 69.85 cents, while business-to-business sales dipped to 3,308 bales and brought an average of 66.67 cents. Staples 35 or more accounted for 25,113 bales or 77% of the G2B sales and 2,218 bales or 67% of the B2B sales. All the sales came from the Southwest.

World values as measured by the Cotlook A Index gained 25 points to 89.05 cents, widening the premium over the prior-day March futures settlement 10 points to 10.70 cents.

In outside markets, U.S. dollar index futures traded down 0.365 to 91.715. Dow Jones Industrial Average futures gained 18 points and S&P futures 2.50 points.

West Texas Intermediate crude oil ticked up 25 cents to $63.82 and Brent crude added 2 cents to $69.22. February gold rose by $2.70 to $1,322. March corn was down 0.07%, March soybeans up 0.08%, March Chicago wheat up 0.63% and March Kansas City wheat up 0.62%.

Asian stocks finished mixed, down 0.33% in Japan’s Nikkei 225, up 0.15% in Hong Kong’s Hang Seng, down 0.47% in South Korea’s Kospi and up 0.11% in China’s Shanghai Composite Index. India’s Sensex was up 0.2%. European shares were trading mostly lower, up 0.06% in Britain’s FTSE 100, down 0.15% in Germany’s DAX and down 0.05% in France’s CAC 40.

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