DTN Cotton Close: Gives Up Gains to Settle Lower

Cotton seedlings. ©Debra L Ferguson Stock Photography

Classing of upland cotton slowed to 62,243 RB last week, lifting the 2017-18 count to 19.549 million RB, up 21% from the prior season’s final. Fire weather conditions and wildfires persisted in the Southwest.

Cotton futures reversed off new seven-week highs in old-crop deliveries and a new contract high in December to settle lower Monday.

Most-active July settled down 61 points to 84.12 cents, near the low of its 135-point range from up 66 points at 85.39 to down 69 points at 84.04 cents. It retreated after climbing to within 44 points of its contract high.

Spot May plunged 228 points to finish at 83.19 cents, trading within a 354-point range from 86.44 to 82.90 cents. First notice day is Tuesday and delivery notices are expected to be posted by tonight.

December eased eight points to settle at 79.35 cents, 10 points from the low of its 65-point range. It posted its second straight new contract high on disappointing weekend rainfall in the Texas High Plains and slipped as the old-crop deliveries weakened.

Volume slowed to an estimated 38,100 lots from 48,700 lots the previous session when spreads accounted for 16,604 lots or 34%, EFP 896 lots and EFS 150 lots. Options volume increased to 12,856 lots (9,229 calls and 3,627 puts) from 11,149 lots (5,973 calls and 5,176 puts).

Classing of U.S. 2017-crop upland cotton slowed last week to 62,243 running bales from 26 gins from 76,234 RB and 33 gins the prior week, according to the Agricultural Marketing Service’s latest weekly recap.

The 2017-18 classing total reached 19.549 million bales, up 21% from the final 16.157 million last season. Cotton tenderable on futures contracts of 67.1% for the season was down from 71.9% last year.

Classing by states included 34,175 RB from 11 gins in Texas, 21,801 RB from also 11 gins in Oklahoma, 6,267 RB from three gins in Kansas and fewer than 500 RB from one gin in Georgia.

Including an unchanged 676,965 RB of Pima, all-cotton classing for the season edged up to 20.225 million RB, also 21% above last season’s final 16.775 million RB. The latest USDA production estimate is up 22% from the prior crop.

Droughty, windy conditions persisted through much of the week in the West Texas Plains, resulting in fire advisories and wildfires. Some producers continued with pre-planting preparations and irrigated, while others opted not to operate irrigation pivots because of gusty winds.

Fieldwork remained generally idle in areas with sandy soils because the soils were so parched that, if disturbed, would erode and blow worse in the persistent wind patterns, AMS said.

Stands were squaring and benefitted from recent rainfall in the Rio Grande Valley. Aphid populations had increased but so had natural predators. Monitoring was underway for fleahoppers and other plant pests.

Planting continued in the Upper Coast and Coastal Bend. Some fields damaged by high winds were replanted. Planting expanded in the Blackland Prairies. Stands struggled to get established in fields planted earlier.

Strong winds and dry conditions increased the potential for bur, cottonseed, gin fires and wildfires in Kansas and Oklahoma. Fires raged for more than five days in Oklahoma. More than 300,000 acres were burned and at least 100 structures were lost. The Florida Forest Service sent 28 firefighters to help. Many producers helped to move bales, modules and cottonseed piles away from the fires and haul water.

Certified stocks grew 1,659 bales to 68,436. There were 1,696 newly certified bales and 37 bales decertified. Open interest expanded 3,826 lots to 262,581 on Friday’s rally, with May’s down 4,299 lots to 3,126, July’s up 4,697 lots to 134,103 and December’s up 3,317 lots to 101,003.

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