DTN Cotton Open: Again Leaps to Triple-Digit Gains

Photo: Clemson University Public Service and Agriculture

May posted its highest intraday price since Feb. 1. Cash online sales jumped to 41,475 bales, largest one-day turnover since Jan. 11, of which 36,540 bales were grower sales.

Cotton futures jumped to the second straight triple-digit old-crop gains in early dealings Wednesday, with most-active May hitting its highest intraday price since Feb. 1.

May hovered up 132 points to 80.27 cents, just off the high of its 175-point range from 78.57 to 80.32 cents on a contract volume of 5,618 lots. March gained 142 points to 78.83 on this last day before first notice day, near the high of its 142-point range from 77.45 to 78.87 cents on a turnover of 1,941 lots.

In ICE cotton futures Tuesday, May rallied from a shallow dip to extend the prior-session gain and close with a triple-digit gain back into the upper third of the 1,693-point rally from the October low to the 84.45-cent contract high in January.

The March-May spread traded from 130 to 145 points carry and widened a point to settle at a 145-point May premium on a volume of 6,924 lots. May-July traded between 98 and 71 points carry and narrowed 21 points to close at a 75-point July premium on 4,970 lots.

Inverted July-December widened 121 points to settle at a 371-point December premium, trading between 240 and 465 points on 2,251 lots.

Cash online sales surged to 41,475 bales from 3,211 bales, the largest one-day turnover since Jan. 11. Prices jumped to an average of 72.17 cents per pound from 63.56 cents, reflecting gains to an average of 21.82 cents from 20.33 cents in premiums over loan rates. Loan values averaged 50.35 cents, up from 49.84 cents.

Grower-to-business sales of 36,540 bales brought an average of 71.67 cents a pound, while business-to-business sales of 4,935 bales sold for prices averaging 75.92 cents. Staples 35 or more made up 25,359 bales or 69% of the G2B sales and 4,420 bales or 90% of the B2B sales.

Of the grower sales, 646 bales came from the Southeast, 34,775 bales from the Southwest and 1,119 bales from the West and brought per-pound averages of 78.33 cents, 71.63 cents and 69.01 cents, respectively. The business sales included 4,928 bales from the Southwest and seven bales from the West, bringing respective per-pound averages of 75.92 and 74.75 cents.

The Cotlook A Index of world values was unchanged at 86.85 cents, leaving the premium over the prior-session May futures settlement flat at 9.69 cents.

In outside markets, U.S. dollar index futures rose to its highest in a week against a basket of currencies and traded up 0.185 to 89.830, while Dow Jones Industrial Average futures dipped 9 points and S&P futures gained 2.25 points ahead of minutes from the Federal Reserve’s last policy meeting later in the day.

West Texas Intermediate crude oil dropped 43 cents to $61.36 and Brent Crude slipped 6 cents to $65.19. April gold ticked up 20 cents to $1,331.40. March corn was up 0.48%, March soybeans up 0.05%, March Chicago wheat up 0.06% and March Kansas City wheat up 0.58%.

Asian stocks closed higher, up 0.21% in Japan’s Nikkei 225, 1.81% in Hong Kong’s Hang Seng and 0.6% in South Korea’s Kospi. India’s Sensex gained 0.42%. European shares were trading mixed, up 0.05% in Britain’s FTSE 100, down 0.62% in Germany’s DAX and down 0.35% in France’s CAC 40.

China’s markets remained closed for the Chinese New Year holidays. Cotton markets will reopen Thursday. India’s MCX cotton prices advanced; crop prices were firm and arrivals fairly steady.

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