DTN Cotton Close: Trades Lower Beyond Maturing May

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No notices issued for May. U.S. cotton planting inched up to 9% completed. Cash online sales dipped to 8,970 bales on The Seam, of which 6,321 bales were grower sales.

Cotton futures ticked lower beyond maturing May in early dealings Tuesday, with most-active July slipping below the prior-session low.

July dropped 79 points to 83.33 cents, near the low of its 129-point range from 84.55 to 83.26 cents on a contract volume of 4,281 lots. May ticked up 14 points to 83.33 cents, even with July within a 100-point range from 84.25 to 83.25 cents on a turnover of 45 lots. December fell 54 points to 78.82 cents, just off the low of its 93-point range from 79.68 to 78.75 cents on 1,108 lots.

No delivery notices were issued on this first notice day for May. Open interest in May coming into Monday’s session was 3,126 lots.

On the crop scene, U.S. cotton planting inched up a percentage point to 9% completed during the week ended Sunday, down from 11% last year and 10% for the five-year average, USDA reported after the close Monday.

Producers had planted 14% of the expected acreage in Texas, up from 12% a year ago and 11% on average, and 4% in Georgia, behind 6% but up from 3%, respectively. Forty-five percent of the Arizona crop was planted, behind the average of 56%. The only other states showing cotton in the ground were Alabama, 3%; Oklahoma, 2%; and South Carolina, 1%.

In ICE cotton futures Monday, July reversed off a moderate gain, extending Friday’s sharp advance, but closed moderately lower near the session low.

The May-July switch traded from an inverted 109 points to 131 points carry and lost 167 points to close at a 93-point July premium on a volume of 3,044 lots. Inverted July-December traded from 558 points to 470 points and narrowed 53 points to settle at a 477-point July premium on 4,899 lots. December-March’s settlement difference narrowed five points to a 14-point December premium on 581 lots.

Cash online sales dipped to 8,970 bales from 9,052 bales on The Seam. Prices climbed to an average of 78.71 cents from 73.79 cents, reflecting premiums over loan rates of 27.67 cents, up from 23.26 cents. Offerings were 102,118 bales.

Grower-to-business sales of 6,321 bales — 4,267 bales from the Mid-South and 2,054 bales from the Southwest — brought an average of 81.70 cents per pound, while business-to-business sales — all from the Southwest brought 86.16 cents.

Staples 35 or more accounted for 5,727 bales or 91% of the G2B sales, including all but one bale of the Mid-South sales, and 2,633 bales or 99% of the B2B sales. Price averages included 86.16 cents per pound for the Mid-South sales and 72.45 cents for the G2B sales from the Southwest.

The Cotlook A Index of world values gained 185 points to 93.80 cents, widening the premium over the prior-day July futures settlement four points to 9.17 cents.

In outside markets, Dow Jones Industrial Average futures gained 134 points and S&P futures 13.25 points. U.S. dollar index futures inched up 0.035 to 90.735.

West Texas Intermediate crude ticked up 23 cents to $68.87 and Brent crude added 19 cents to $74.90. June gold gained $1.70 to $1,325.70. July corn was down 0.26%, July soybeans down 0.15% and July wheat down 0.8%.

Asian stocks closed mostly higher, up 0.86% in Japan’s Nikkei 225, up 1.26% in Hong Kong’s Hang Seng, down 0.4% in South Korea’s Kospi and up 2% in China’s Shanghai Composite. European shares were trading higher, up 0.4% in Britain’s FTSE 100, 0.27% in Germany’s DAX and 0.07% in France’s CAC 40.

China’s Zhengzhou cotton futures and prices on the China National Cotton Exchange settled mixed. India’s MCX cotton futures were weak.

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