DTN Cotton Open: Slips to New Low for Move

Photo by Larry Stalcup

Consumer prices exceeded expectations on a rise of 0.5% in January. Cash online cotton online sales declined to 6,295 bales, which included 5,912 bales of grower sales.

Cotton futures traded in the red in early dealings Wednesday, with March slipping to another new low for the move.

March hovered off 64 points to 75.74 cents, near the low of its 82-point range from 76.45 — where it opened overnight — to 75.63 cents on a volume of 1,806 lots. It traded just below Tuesday’s low of 75.66 to a new low intraday print since Dec. 21. May dropped 52 points to 76.88 cents, trading within a 66-point range from 77.41 to 76.75 on 3,739 lots.

In ICE cotton futures Tuesday, March closed on a marginal loss, climbing from a new low since Dec. 21. It has finished on new lows for the move in six of the last eight sessions and lost a net loss 197 points on a closing basis. The Goldman Sachs index fund roll from March was completed.

The March-May spread traded between 118 and 93 points carry and widened two points to close at a 102-point May premium on 13,440 lots. May-July traded between 103 and 96 points carry and widened three points to settle at a 102-point July premium on 6,996 lots.

Inverted July-December narrowed 15 points to close at a 255-point July premium on 3,553 lots, trading between 245 and 279 points on 3,553 lots.

Cash online sales declined to 6,295 bales from 9,558 bales on prices averaging 67.11 cents per pound, down from 69.01 cents. Premiums over loan rates averaged 18.46 cents, down from 19.95 cents. Loan values on the turnover dropped to an average of 48.66 cents from 49.05 cents.

Grower-to-business sales of 5,912 bales brought an average of 67.62 cents a pound, while business-to-business sales of 383 bales sold for an average of 59.30 cents. The G2B sales included 5,789 bales from the Southwest and 123 bales from the West. All the B2B sales were from the Southwest.

Staples 35 or more accounted for 3,547 bales or 65% of the G2B sales, including 3,528 bales from the Southwest and 19 bales from the West, and 331 bales or 86% of the B2B sales. The sales from the Southwest sold for an average of 67.59 cents and those from the West for 67.62 cents.

The Cotlook A Index of world values dropped 20 points to 82.35 cents, widening the premium over the prior-day March futures settlement three points to 10.80 cents.

In outside markets, U.S. dollar index futures rose and U.S. stock index futures tumbled after the Labor Department’s CPI report offered fresh evidence that inflation pressures appear to be stirring after a long run of softness.

The consumer-price index rose 0.5% in January after rising a seasonally adjusted 0.2% in December, the Labor Department said. Excluding the volatile food and energy categories, so-called core prices rose 0.3%, compared with 0.2% in December. Economists had expected consumer prices to rise 0.4% in January and core prices to rise 0.2%.

Greenback futures traded up 0.290 to 89.880, while volatile Dow Jones Industrial Average futures reversed off earlier strong gains to trade down 263 points and S&P futures ticked down 30 points.

West Texas Intermediate crude lost 79 cents to $58.40 and Brent crude fell 61 cents to $62.11. April gold traded up $2.90 to $1,333.30. March corn was down 0.41%, March soybeans down 0.44%, March Chicago wheat down 1.41% and March Kansas City wheat down 1.11%.

Asian markets closed mixed ahead of the U.S. inflation data, down 0.43% in Japan’s Nikkei 225, up 2.27% in Hong Kong’s Hang Seng, up 1.11% in South Korea’s Kospi 1.1% and up 0.46% in China’s Shanghai Composite Index. India’s Sensex was down 0.42%. European shares were trading higher, up 0.61% in Britain’s FTSE 100, 0.54% in Germany’s DAX and 0.65% in France’s CAC 40.

China’s Zhengzhou cotton futures and prices on the China National Cotton Exchange settled higher. India’s MCX cotton futures and S-6 prices were lower.

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