DTN Cotton Open: Shows Green in Early Dealings

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Consumer prices rose 0.2% in February and 2.2% on the year. China sold 129,061 bales of its reserve stocks. Cash online sales slowed to 2,272 bales on The Seam, of which 1,769 bales were grower sales.

Cotton futures traded higher on light early volume in early dealings Tuesday, with May confined within the prior-session range.

May hovered up 64 points to 83.92 cents, trading within a 118-point range from 83.03 to 84.21 cents on a contract volume of 2,132 lots. July ticked up 63 points to 83.84 cents on 988 lots and December traded up 18 points at 78.90 cents on 1,185 lots. December touched a new contract high at 78.94 cents.

In outside markets, U.S. dollar index futures slipped into the loss column and U.S. stock index futures extended gains after data on consumer prices in February was viewed as the latest indication that an anticipated pickup in inflation probably will be only gradual.

U.S. consumer prices rose moderately in February, although at a slightly slower pace than in the prior month, Dow Jones Newswires reported.

The consumer-price index, which measures what Americans pay for everything from shampoo to hotel stays, rose 0.2% in in February after rising a seasonally adjusted 0;.5% in January, the Labor Department said.

Excluding the volatile food and energy categories, so-called core prices rose 0.2%, compared to 0.3% in January. In the year to February, overall prices rose 2.2%, the largest annual increase since November. Core prices were up 2.2% on the year.

Greenback futures traded down 0.135 to 89.730, while Dow Jones Industrial Average futures gained 92 points and S&P futures 13 points. West Texas Intermediate crude oil dropped 37 cents to $61.13 and Brent crude dipped 26 cents to $64.69. May corn was up 0.32%, May soybeans up 0.6% and July Kansas City wheat up 0.88%.

Meanwhile, China sold 28,100 metric tons (129,061 480-pound bales) in the first day of its resumed auctioning of reserve stocks, 93.6% of total offerings of 30,000 tons (137,788 bales).

China’s Zhengzhou cotton futures closed on sharp losses prices settled moderately lower on the China National Cotton Exchange.

In ICE cotton futures Monday, May extended the prior session’s reversal down to settle sharply lower and below the prior-session low.

The May-July switch traded from an inverted 35 points to eight points of carry and narrowed 26 points to close at a seven-point May premium on a volume of 5,016 lots. Inverted July-December traded between 440 and 595 points and narrowed 98 points to close at a 449-point July premium on 2,787 lots. December-March widened three points to settle at an 11-point March premium on a spread volume of 437 lots.

Cash online sales slowed to 2,272 bales from 5,069 bales on The Seam. Prices averaged 70.73 cents, down from 72.41 cents, reflecting a drop to an average of 22.44 cents from 23.83 in premiums over loan rates. Offerings were 85,641 bales.

Grower-to-business sales of 1,769 bales and business-to-business sales of 503 bales brought averages of 69.82 and 73.94 cents per pound, respectively. Staples 35 or more accounted for 1,498 bales or 85% of the G2B sales and 250 bales or 50% of the B2B sales. All the sales were from the Southwest.

World values as measured by the Cotlook A Index dropped 50 points to 93.90 cents, widening the premium over the prior-day May futures settlement 10 points to 9.38 cents.

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