DTN Cotton Open: Ticks Quietly Within Tight Ranges

Photo by Debra L Ferguson - Southern Images

Chances for rain in the Texas High Plains cotton area at Lubbock rated at 20% on Thursday and 50% on Friday, extending as likely into Friday night and as slight into Saturday. U.S. cotton planting inched up to 8% completed.

Cotton futures ticked quietly on slight gains within narrow price ranges in early dealings Tuesday, with most-active July confined within the prior-session trading band.

July eked up 11 points to 83.33 cents, trading within a 36-point range between 83.13 and 83.49 cents on a contract volume of 2,031 lots. May gained 20 points to 83.45 cents, trading within a 43-point range between 83.15 and 83.58 cents on a turnover of 968 lots. December ticked up four points to 78.58 cents, trading within a 26-point range between 78.42 and 78.68 cents on 447 lots.

Chances for showers and thunderstorms in the Texas High Plains cotton area at Lubbock now are rated at 20% on Thursday and 50% on Friday, extending as likely into Friday night and as slight into Saturday. Much more rain likely will be needed ahead of planting that typically begins on a limited scale in late April ahead of opening of the traditional optimum period on May 5.

“Extremely dangerous fire conditions” — rarely used terminology — are expected Tuesday with near record heat, humidity of 1% to 5% and temperatures 20 degrees above normal with sustained winds at 25 mph to 35 mph with gusts to 50 mph. The high at Lubbock is forecast at 90 degrees.

 

On the U.S. crop scene, cotton planting inched up a percentage point to 8% completed during the week ended Sunday, even with last year and up a point from the five-year average, USDA reported after the close Monday.

Thirteen percent of the Texas crop had been planted, compared with 12% the week before, 11% last year and 10% on average. Thirty-seven percent had been planted in Arizona, down from 39% a year ago and 41% for the average. Only two other states reported cotton in the ground — 1% in Alabama and Georgia, matching the five-year averages in both states.

In ICE cotton futures Monday, most-active July settled on a slight loss after pushing above highs of the prior four weeks.

The May-July switch traded between 33 points July/over and 43 points May/over and narrowed three points to close at a three-point May premium on 10,038 lots. Inverted July-December traded between 426 and 515 points and widened 24 points to close at a 468-point July premium on 2,319 lots. December-March’s settlement difference widened a point to 13 points carry on 234 lots.

Cash online trading declined to 5,182 bales from 14,450 bales on The Seam. Prices averaged 72.13 cents, down from 73.27 cents, as premiums over loan rates declined to an average of 22.93 cents from 23.24 cents. Offerings were 00,692 bales.

Grower-to-business and business-to-business sales of 3,852 bales and 1,960 bales brought averages of 72.17 and 72.05 cents per pound, respectively. Staples 35 or more accounted for 3,000 bales or 78% of the G2B sales and 1,828 bales or 93% of the B2B sales. All the sales were from the Southwest.

The Cotlook A Index of world values dropped 30 points to 92.65 cents, narrowing the premium over the previous-session May futures settlement two points to 9.24 cents.

In outside markets, Dow Jones Industrial Average futures gained 217 points and S&P futures 16.50 points amid optimism for a strong earnings season. U.S. dollar index futures rose by 0.140 to 89.275.

West Texas Intermediate crude oil dipped 36 cents to $65.84 and Brent crude dropped 16 cents to $71.26. June gold fell $7.50 to $1,343.20. July corn was up 0.13%, July soybeans up 0.17% and July Kansas City wheat up 0.91%.

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