DTN Cotton Close: Finishes Inside Day on Slight Losses

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U.S. upland classing reached 16.291 million RB, around 81% of USDA’s slightly reduced production estimate. Planting intentions survey deadline is Wednesday.

Cotton futures settled on slight losses Tuesday following the long holiday weekend, with spot March completing an inside day within Friday’s broad-range bearish reversal.

March settled down 25 points to 81.43 cents, just above the midpoint of its 143-point range from down 106 points at 80.62 cents to up 37 points at 82.05 cents. May finished down 29 points to 81.67 cents, trading within a 131-point range from 80.90 to 82.21 cents.

A stock market retreat from a broad early surge that lifted the Dow Jones Industrial Average beyond the 26,000-point threshold for the first time may have contributed to the cotton pressure.

Volume slowed to an estimated 37,500 lots from 75,538 lots the previous session when spreads accounted for 38,213 lots or 51%, EFS 585 lots and EFP 493 lots. Options volume totaled 7,986 lots (2,716 calls and 5,270 puts).

U.S. upland cotton classing slowed to 662,791 running bales during the week ended Thursday from the prior week’s 686,847 RB, bringing the total for the season to 16.291 million RB, according to the latest weekly figures from USDA’s Agricultural Marketing Service.

Classing of 2017-crop upland cotton amounted to around 81% of USDA’s slightly reduced January forecast and was up 16% from 14.065 million RB a year ago when about 87% of the final output had been graded.

Tenderable cotton slipped to 53.4% for the week and 71.1% for the season from 55.7% and 71.8%, respectively, the prior week. A year ago, 67.3% for the week and 71% for the season met tenderable requirements.

Classing of 433,293 RB in Texas from samples submitted by 147 gins boosted the statewide total to 7.079 million RB, up 12% from 6.319 million RB graded last year and 65% of the U.S. total for the week.

The two classing offices on the Texas High Plains have graded 4.23 million RB, including 2.869 at Lubbock and 1.354 million at Lamesa, and the Abilene facility has classed 610,375 RB of West Texas cotton.

Dry conditions persisted across the West Texas Plains, AMS reported. A wintry front late in the period brought less than two-tenths of an inch of precipitation to a localized area near the New Mexico border.

Winds gusted to more than 50 miles per hour and wind turbines were shut down. Harvesting was mostly completed, but cotton remained on the stalk in some fields. Modules continued to be transported to gin yards.

A few gins finished for the season on the High Plains. The exceptionally large crop in the northern area challenged ginning capacity and gins were less than 50% completed.

The Corpus Christi classing office has graded 2.232 million RB. About 10 gins continued operations in the northern Blackland Prairies, the Winter Garden and in South Texas.

Classing of Pima cotton increased to 39,770 RB from 31,902 the week before to raise the extra-long staple total for the season to 541,889 RB, up from 445,000 RB a year ago.

Meanwhile, the National Cotton Council has reminded producers that the deadline for responding to its 2018 U.S. planting intentions survey is Wednesday. Survey results will be reported at a joint meeting of program committees at the council’s annual convention on Feb. 10 in Fort Worth.

Futures open interest grew 4,149 lots to 299,625 on Friday, with March’s up 44 lots to 168,907, May’s up 879 lots to 64,287 and July’s up 2,126 lots to 26,161. Certified stocks were unchanged at 48,110 bales.

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