DTN Cotton Open: Trades Higher Amid Strong Export Sales

©Debra L Ferguson Stock Images

U.S. weekly export sales topped expectations at 399,100 RB and shipments rose to 333,500 RB. Additional 419 notices issued on March. Cash online sales slowed to 9,692 bales on The Seam, of which 4,475 bales were grower sales.

Cotton futures traded higher in early dealings Friday, bolstered by another larger-than-expected U.S. weekly export sales report.

Most-active May hovered up 56 points to 80.03 cents, trading within a 91-point-range from 79.37 to 80.28 cents on a contract volume of 3,782 lots. It finished last Friday at 77.16 cents.

Net upland export sales came in at a strong 399,100 running bales for the week ended Feb. 15, up 9% from the prior week and 40% from the prior four-week average.

Slower sales had been expected, mainly because of holidays in China for the Lunar New Year. But China was the leading buying destination on purchases of 68,400 RB, including decreases of 3,100 RB. Gross overall sales were 427,600 RB and cancellations were 28,500 RB. Sales went to 20 countries.

Net sales for shipment next season of 177,200 RB brought the total for both crop years to a whopping 576,300 RB, up from 498,400 RB the previous week. The new-crop sales went primarily to China and Bangladesh, partially offset by cancellations of 6,600 RB to India.

Upland shipments of 333,500 RB were up 3% from the previous week and from the four-week average. Shipments went to 21 countries, led by China, Vietnam, Pakistan, Turkey and Indonesia.

Net Pima sales of 3,600 RB for this season rose 31% from the previous week but fell 42% from the four-week average, while shipments of the extra-long staple cotton of 21,200 RB were up 20% and 25%, respectively.

Meanwhile, an additional 419 March delivery notices were issued Friday for a two-day total of 499. Term Commodities issued 405 and the others appeared to have been retenders. All were stopped by INTL FCStone Securities.

In ICE cotton futures Thursday, May gave back 92 points of three-day gains totaling 362 points, trading within the prior-session range ahead of the weekly export sales-shipments report.

The March-May spread traded from 159 points of carry to an inverted 175 points, and finished up 255 points on a 107-point March premium on a volume of 257 lots. May-July traded between 96 and 72 points of carry and widened 23 points to close at a 94-point July premium on 1,766 lots.

Inverted July-December narrowed 65 points to close at a 405-point July premium, trading between 296 and 470 points on 1,766 lots.

Cash online sales slowed to 9,692 bales from 22,549 bales on The Seam on prices averaging 70.22 cents, down from 71.37 cents. Premiums over loan rates slipped to an average of 21.37 cents from 22.46 cents. Loan values averaged 48.85 cents, down slightly from 48.91 cents.

Grower-to-business sales of 4,475 bales brought an average of 66.08 cents per pound, while business-to-business sales of 5,217 bales brought an average of 83.78 cents. Staples 35 or more accounted for 3,275 bales or 73% of the grower sales and 4,315 or 83% of the business sales.

All the G2B sales came from the Southwest. Included in the business sales were 1,144 bales from the Southeast, 3,867 bales from the Southwest and 206 bales from the West that brought per-pound price averages of 81.27 cents, 71.52 cents and 74.54 cents, respectively.

The Cotlook A Index of world values gained 150 points to 90.20 cents, widening the premium over the prior-day May futures settlement seven points to 9.81 cents.

The Latest