DTN Cotton Open: Again Narrowly Mixed in Early Action

Net U.S. weekly upland export sales came in within the expected range at 290,200 RB. Upland shipments dipped to 362,000 RB. Cash online sales edged up to 8,064 bales on The Seam, of which grower sales were 4,678 bales.

Cotton futures ticked narrowly mixed in early dealings Thursday for a second morning as U.S. weekly export sales came in near the top of a range of expectations.

July eased nine points to 82.52 cents, trading within a 53-point range from 82.80 to 82.27 cents on a contract volume of 3,444 lots. May traded up four points to 72.78 cents, ticking within a 44-point range between 82.56 and 83 cents on 662 lots. December edged up eight points to 78.40 cents, trading within a 30-point span from 78.49 to 78.19 cents on 854 lots.

Net upland export sales of 290,200 running bales during the week ended last Thursday for shipment this season rose by 62% from the previous week but dipped 2% from the prior four-week average, USDA reported. Trader expectations had ranged from 200,000 to 300,000 RB.

Sales went to 18 countries, led by China, Vietnam, Turkey, Indonesia and Bangladesh. Gross sales were 301,500 RB and cancellations fell to 12,200 RB, including 3,000 to Hong Kong and 2,900 to India. Net upland sales for next season rose to 229,800 RB from 28,700 the prior week. Leading buyers were Vietnam, Indonesia, China and Pakistan.

Upland shipments of 362,000 RB dropped 28% from the previous week and 20% from the four-week average. Shipments headed to 25 countries, led by Vietnam, China, Pakistan, Turkey and Bangladesh.

Net Pima sales for this season of 4,900 were up from 900 the prior week but down 6% from the four-week average, while shipments of 9,300 RB fell 23% and 51%, respectively.

On the weather scene, updated forecasts for the drought-stricken Texas High Plains cotton area around Lubbock rated chances for showers and thunderstorms at 50% Friday, 70% Friday night and 30% Saturday. Dry, windy conditions are expected Thursday.

In ICE cotton futures Wednesday, July settled slightly lower for the third straight session, finishing at a seven-session low close back below its nine-day moving average.

The May-July switch traded between an inverted 10 and 25 points and narrowed five points to close at a 13-point July premium on a volume of 5,063 lots. Inverted July-December traded between 407 and 475 points and narrowed 26 points to settle at a 429-point July premium on 2,723 lots. December-March’s settlement difference widened four points to a 10-point March premium on 329 lots.

Cash online sales edged up to 8,064 bales from 7,514 bales on The Seam on an average price of 69.48 cents, up from 67.27 cents. Premiums over loan rates averaged 20.33 cents, up from 19.79 cents. Offerings were 100,239 bales.

Grower-to-business sales of 4,678 cents brought an average of 71.43 cents per pound and business-to-business sales of 3,389 bales brought an average of 66.78 cents. Staples 35 and more accounted for 3,803 bales or 81% of the G2B sales and 3,084 bales or 91% of the B2B sales. All the sales were from the Southwest.

The Cotlook A Index of world values dropped 25 points to 92.20 cents, widening the premium over the prior-day July futures settlement two points to 9.25 cents.

In outside markets, Dow Jones Industrial Average futures traded down 102 points and S&P futures down 10.25 points. U.S. dollar index futures eased 0.050 to 89.295.

West Texas Intermediate crude oil gained 58 cents to $69.05 and Brent crude added $1.05 to 74.53. July corn was down 0.06%, July soybeans down 0.09% and July Kansas City wheat up 1.03%.

Asian stocks closed higher, up 0.46% in Japan’s Nikkei 225, 0.15% in Hong Kong’s Hang Seng, 0.25% in South Korea’s Kospi and 0.85% in China’s Shanghai Composite. India’s Sensex gained 0.28%. European shares were higher, up 0.26% in Britain’s FTSE 100, 0.17% in Germany’s DAX and 0.09% in France’s CAC 40.

China’s Zhengzhou cotton futures and prices on the China National Cotton Exchange ended mostly with gains. India’s MCX cotton futures were weak and local prices eased further.

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