DTN Cotton Close: Mixed Ahead of Weekly Export Sales

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Slowed U.S. weekly upland export sales again generally expected in the delayed USDA report. Initial USDA projections for 2018-19 put upland plantings at 13.3 million acres and average farm-level prices at 63 cents.

Cotton futures finished mixed Thursday, with most-active May losing the most while remaining within the previous-session range ahead of the U.S. weekly export sales-shipments report.

May closed down 92 points to 79.47 cents, in the lower quarter of its 107-point range from down nine points at 80.30 cents to down 116 points at 79.23 cents. March settled up 163 points to 80.54 cents, trading between 78.42 and 81.34 cents.

July dropped 69 points to close at 80.41 cents and December eased four points to settle at 76.36 cents. The other contracts finished down 52 to up 33 points.

Volume slowed to an estimated 27,500 lots from 53,062 lots the prior session when spreads accounted for 26,836 lots or 51%, EFP 936 lots and EFS 261 lots. Options volume declined to 1,941 lots (1,001 calls and 940 puts) from 6,290 lots (2,875 calls and 3,415 puts). The exchange has raised the daily trading limit to 400 points from 300 points.

Weekly upland export sales are expected to come in below those of the prior week in Friday’s USDA report. China, the largest export customer thus far this season, was on holidays for the Chinese New Year.

Prices during the reporting week ranged between 78.32 and 76.44 cents, basis May futures, and ended with a loss for the period of 79 points to close at 76.77 cents.

The report, delayed a day by the Presidents Day holiday on Monday, is set for release at 7:30 a.m. CST for the week ended last Thursday. Net upland sales the prior week slowed to a still-strong 364,800 running bales for shipment this season, beating expectations.

Upland sales the last four weeks have averaged 284,600 RB, including the second lowest of the marketing year of 67,684 RB for the week ended Jan. 18, and shipments have averaged 333,700 RB.

All-cotton 2017-18 commitments through Feb. 8, up 22% from a year ago, were within roughly 1.08 million RB of the USDA forecast with 24-plus weeks left in the marketing year. Cumulative shipments left a rounded 8.7 million RB to be exported to meet the estimate.

Meanwhile, preliminary 2018-19 projections at USDA’s Outlook Conference may have weighed on market sentiment.

Upland plantings are forecast at 13.3 million acres, up 7% from 12.4 million acres last year, and the average farm price at 63 cents, down 9% from 69 cents estimated for this season.

Initial USDA projections put corn and soybeans plantings at 90 million acres each, almost unchanged from 90.167 million and 90.142 million, respectively, last year. All-wheat acres are forecast at 46.5 million, compared with 46.012 million in 2017-18.

Farm price projections included $3.40 per bushel for corn and $9.25 per bushel for soybeans, compared with $3.30 and $9.30, respectively, estimated for 2017-18. The wheat average farm price is forecast at $4.70 per bushel, up from $4.60 for 2017-18.

Cotton futures open interest gained 1,119 lots to 252,971 on Wednesday, with March’s down 6,778 lots to 1,051 and May’s up 4,184 lots to 126,424. Certified stocks grew 465 bales to 93,888. Awaiting review were 1,600 bales at Galveston.

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