DTN Cotton Open: Extends Run to New Highs Overnight

Photo by Larry Stalcup

March hit 84.65 cents. Supply-demand estimates scheduled for release by USDA at 11 a.m. CST. Cash online sales rose to a marketing year high of 52,922 bales on The Seam.

Cotton futures extended a run to new contract highs in current-crop deliveries overnight and traded on modest gains in heavy early dealings Friday ahead of USDA’s supply-demand reports due later in the session.

Spot March hovered up 46 points to 83.08 cents, trading within a 185-point range from 82.80 to 84.65 cents on a contract volume of 10,471 lots. May ticked up 14 points to 83.09 cents, trading within a 159-point range from 82.86 to 84.45 cents on a turnover of 4,589 lots.

The USDA estimates, set for release at 11 a.m. CST, are expected to show a slight decrease in the U.S. crop, a 300,000-bale hike in exports and a decline to 5.51 million bales from 5.8 million bales forecast last month in ending stocks. Survey carryout estimates ranged from 4.91 million to 6.06 million bales, up from 2.75 million bales last season.

The global balance sheet is expected on average to show a drop in ending stocks to 87.29 million bales from 88 million projected by USDA in December. Analysts’ estimates ranged from 86 million to 88.5 million bales.


China’s Zhengzhou cotton futures ended mostly with triple-digit gains and prices settled higher on the China National Cotton Exchange. India’s MCX cotton futures posted strong gains and crop prices rose again.

In ICE cotton futures Thursday, March locked up the 300-point daily limit at 82.65 cents and posted a synthetic close of 82.91 cents for informational and option settlement purposes only.

The March-May spread traded between even money and a 31-point May premium and with May also limit up closed unchanged at 31 points May/over on a volume of 9,063 lots. May-July traded between 24 points carry and a five-point inversion and narrowed 15 points to settle at a four-point July premium on 2,753 lots.

Cash online sales rose to a marketing year high of 52,922 bales from 35,761 bales on The Seam on prices averaging 73.26 cents, up from 69.56 cents. Premiums over loan rates rose to an average of 23.07 cents from 20.74 cents. Loan values averaged 50.19 cents, up from 48.82 cents. Offerings were 106,396 bales.

Grower-to-business sales of 41,627 bales brought an average price of 72.46 cents, while prices averaged 76.23 cents on business-to-business sales of 11,353 bales. Staples 35 or more accounted for 30,859 bales or 74.1% of the G2B sales and 10,m763 bales or 94.8% of the B2B sales.

The Cotlook A Index of world values gained 130 points to 90.35 cents, leaving the premium over the prior-day March futures settlement unchanged at 10.70 cents.

In outside markets, U.S. dollar index futures traded down 0.440 to 91.170, while U.S. stock index futures ticked mixed, up 73 points in Dow Jones Industrial Average futures and down 0.75 of a point in S&P futures as traders digested fourth-quarter earnings reports from big lenders. February gold gained $4.70 to $1,327.20.

West Texas Intermediate crude oil lost 57 cents to $63.23 after rising the day before to its strongest since late 2014 at $64.77. Brent crude, the global benchmark, fell 38 cents to $68.88 after climbing above $70 on Thursday for the first time since December 2014. February gold traded up $4.70 to $1,327.20.

Asian stocks closed mostly higher, down 0.24% in Japan’s Nikkei 225, up 0.94% in Hong Kong’s Hang Seng, up 0.34% in South Korea’s Kospi and up 0.12% in China’s Shanghai Composite Index. India’s Sensex gained 0.26%. European shares traded mostly higher, up 0.18% in Britain’s FTSE 100, down 0.03% in Germany’s DAX and up 0.22% in France’s CAC 40.

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