DTN Cotton Close: Extends Losing Streak to 4

©Debra L Ferguson Stock Photography

March closed dead even with the prior-day low and the low of Dec. 21. U.S. export commitments reached 92% and shipments 38% of the USDA’s new 2017-18 forecast.

Cotton futures settled slightly lower Thursday, extending a losing streak to four in a row on the heels of the U.S. weekly export sales-shipments report.

March closed down 19 points to 75.41 cents, a new low close since Dec. 19 and around the lower third of its 118-point range from up 69 points at 76.29 cents to down 49 points at 75.11 cents. It finished dead even with the prior-session low and the low of Dec. 21.

May settled down 20 points to 76.77 cents, trading within a 121-point range from 77.65 to 76.44 cents, and July closed down 24 points to 77.76 cents. December dipped 15 points to settle at 75.49 cents.

Volume slowed to an estimated 38,000 lots from 50,381 lots the previous session when spreads accounted for 33,298 lots or 66%, EFP 223 lots and EFS 120 lots. Options volume rose to 7,652 lots (5,842 calls and 1,810 puts) from 3,577 lots (1,602 calls and 1,975 puts).

Net all-cotton export sales for shipment this season of 367,600 running bales during the week ended Feb. 8, down from 410,100 RB the previous week, raised 2017-18 commitments to 12.981 million RB.

Upland net sales of 364,800 RB, down 9% from the prior week but up 39% from the four-week average, topped expectations that had ranged mostly up to 250,000 RB. Sales of heavily discounted low micronaire cotton may have factored into the business.

All-cotton commitments reached 12.981 million RB, widening the lead over year-ago cumulative sales 133,000 RB to 2.343 million RB or to 22%. Commitments were 92% of the new and lower USDA export estimate, compared with 73% of final 2016-17 exports a year ago.

All-cotton shipments of 342,400 RB, down from the prior week’s marketing year high of 453,300 RB, lifted exports for the season to 5.366 million RB. The gap behind year-ago exports narrowed to 530,000 RB or 9%.

Upland exports of 324,700 RB were down 25% from the prior week but up 3% from the four-week average, while Pima shipments of 17,800 RB dropped 15% and rose 12%, respectively.

Shipments stand at 38% of USDA’s downwardly revised projection, compared with 41% of last season’s final exports at the corresponding point in the marketing year.

To achieve the USDA forecast, shipments need to average roughly 362,500 RB per week for the remaining 24-plus weeks in the crop year, while sales averaging around 45,200 RB would match the export projection.

Net all-cotton sales for shipment next season of 130,800 RB, up from 118,500 RB the week before, boosted 2018-19 bookings to 1.861 million RB, up from 871,000 RB in forward sales a year ago.

New-crop commitments have reached about 13% of the National Cotton Council’s export forecast for 2018-19. Forward sales a year ago were about 6% of the current 2017-18 estimate.

Futures open interest declined 4,091 lots to 262,550 on Thursday, with March’s down 7,298 lots to 23,472 and May’s up 1,159 lots to 118,494. Certified stocks grew 1,707 bales to 90,149. Awaiting review were 1,707 bales at Galveston.

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