December hit new contract high. Only skimpy rain fell over the weekend in the Texas High Plains cotton area. Trend-following funds bought 2,131 lots. Cash online sales slipped to 9,052 bales on The Seam.
Cotton futures ticked higher in early dealings Monday, extending last week’s gains after only skimpy rain fell in the droughty Texas High Plains over the weekend.
July hovered up 41 points to 85.14 cents, trading within an 80-point from 84.45 to 85.25 cents on a contract volume of 5,668 lots. May gained 68 points to 86.15 cents, trading within a 77-point range from 85.51 to 86.28 cents on 546 lots ahead of its first notice day on Tuesday. December added 23 points to79.66 cents, trading within a 46-point range from 79.32 to a new contract high at 79.78 cents on 1,817 lots.
Rainfall at West Texas Mesonite sites in the High Plains cotton area ranged from a trace to around half an inch over the weekend. The heavier amounts were in the northern district. None was reported at many dryland sites.
Meanwhile, trend-following funds bought 2,131 lots to raise their net longs to 79,513 lots 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 added 1,223 longs and covered 908 shorts. Index funds boosted their net longs 3,435 lots to 83,217, while traders with non-reportable positions reduced theirs 2,869 lots to 4,708.
Commercials sold a net 2,697 lots, liquidating 13,303 longs and covering 10,606 shorts to cut their net shorts to 167,438. Open interest declined 33,267 lots to 314,766.
In ICE cotton futures Friday, spot May finished on a new contract high close, July settled within 25 points of its contract high finish and December hit both a new contract high and contract high settlement. Large unpriced old-crop mill sales, diminished rain chances on the Texas High Plains and Thursday’s weekly report showing strong U.S. export demand and shipments above the pace needed to make the forecast lifted futures.
The May-July spread traded from an inverted 12 to 91 points and widened 15 points to close at a 74-point May premium on a volume of 4,791 lots. Inverted July-December traded from 423 to 538 points and widened 107 points to settle at a 530-point July premium on 5,034 lots. December-March widened 15 points to finish at a 19-point December premium on 301 lots.
Cash online sales slipped to 9,052 lots from 10,562 bales on The Seam. Prices rose to an average of 73.79 cents from 71.36 cents, reflecting gains in premiums over loan rates to 23.26 cents from 21 cents. Offerings were 89,397 bales.
World values as measured by the Cotlook A Index gained 25 points to 82.82 cents, widening the premium over the prior-day July futures settlement four points to 9.13 cents.
In outside markets, U.S. dollar index futures traded up 0.370 to 90.455 as U.S Treasury yields rose, while Dow Jones Industrial Average futures ticked up 47 points and S&P futures 5.75 points.
West Texas Intermediate crude oil fell nine cents to $47.43 and Brent crude dropped 62 cents to $73.44. June gold gained $11.10 to $1,327.20. July corn was up 0.32%, July soybeans up 0.14% and July Kansas City wheat up 0.95%.
Asian stocks closed lower, down 0.33% in Japan’s Nikkei 225, 0.54% in Hong Kong’s Hang Seng, 0.09% in South Korea’s Kospi and 0.1% in China’s Shanghai Composite. European shares traded mixed, down 0.03% in Britain’s FTSE 100, up 0.09% in Germany’s DAX and up 0.08% in France’s CAC 40.
China’s Zhengzhou cotton futures and prices on the China National Cotton Exchange settled higher. India’s MCX cotton futures and local prices were firm.