DTN Cotton Open: Trades At or Near Lows in Early Going

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May ticked below lows of prior seven sessions. Trend-following funds boosted their net longs 2,355 lots, the third straight weekly increase. Cash online sales slowed to 3,079 bales.

Cotton futures ticked lower early dealings Monday, with spot May trading below lows of the previous seven sessions.

May hovered off 78 points to 82.07 cents, the low of its 93-point range on a contract volume of 2,957 lots. It posted the session high at 82.99 cents on the opening overnight.

July ticked down 87 points to 82.22 cents, barely off the low of its 87-point range from 83.08 to 82.33 cents on a turnover of 809 lots. December dropped 63 cents to 77.65 cents, a tick off the low of its 55-point range from 78.20 to 77.66 cents on a volume of 356 lots.

Meanwhile, trend-following funds boosted their net longs 2,355 lots to 87,192 in ICE cotton futures-options combined during the week ended Tuesday, according to traders-commitments data reported by the Commodity Futures Trading Commission after the close Friday.

They’ve expanded their net longs three consecutive weeks, the latest for a span in which prices traded from 81.78 to 85.55 cents, basis May, and settled with a 55-point gain for the period at 82.98 cents. Index funds increased their net longs 2,155 lots to 84,884, while non-reportable traders decreased theirs 863 lots to 6,682.

Commercials sold a net 3,647 lots, adding 3,660 shorts along with 13 longs to raise their net shorts to 178,757 lots. Open interest increased 4,816 lots to 338,148.

In futures Friday, May lost 68 points for the day and 167 points for the week, closing back below its nine-day moving average on Monday and remaining below it on a closing basis the remainder of the week.

The May-July switch traded between 14 and four points carry and widened six points to settle at a 13-point July premium on a volume of 3,003 lots. Inverted July-December traded between 464 and 549 points and narrowed 71 points to close at a 470-point July premium on 1,405 lots. December-March widened a point to a 19-point March settlement premium on 187 lots.

Cash online sales slowed to 3,079 bales from 4,559 bales on The Seam. Prices fell to an average of 72.51 cents from 74.61 cents, with premiums over loan rates falling to an average of 23.12 cents from 25.44 cents. Offerings were 87,610 bales.

The Cotlook A Index of world values was unchanged at 92.85 cents, narrowing the premium over the prior-day May futures settlement nine points to 9.32 cents.

In outside markets, U.S. dollar index futures traded down 0.185 at 89.610, while Dow Jones Industrial Average futures slid 119 points and S&P futures shed 13 points. Markets braced for signals from the Federal Reserve for the future path of interest rates at its at its policy meeting at its two-day policy meeting set to begin Tuesday.

May West Texas Intermediate crude oil traded up a cent to $62.42 and Brent crude ticked up 8 cents to $66.29. April gold traded flat at $1,312.30. May corn was down 1.11%, May soybeans off 1.45% and July Kansas City wheat down 3.10%.

Asian stocks closed mixed, down 0.9% in Japan’s Nikkei 225, up 0.04% in Hong Kong’s Hang Seng, down 0.76% in South Korea’s Kospi and up 0.03% in China’s Shanghai Composite. India’s Sensex dropped 0.7%. European shares were trading lower down 1.34% in Britain’s FTSE 100, 0.81% in Germany’s DAX and 0.57% in France’s CAC 40.

China’s Zhengzhou cotton futures declined, prices stabilized on the China National Cotton Exchange and China’s base cotton auction price increased. India’s MCX cotton futures fell

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