DTN Cotton Open: Ticks in Green as Markets Eye Talks

July posts triple-digit gain and December climbs to new contract high. Cash grower sales of 3,392 bales changed hands at an average of 69.95 cents per pound on The Seam.

Cotton futures ticked in the green in early dealings Friday as traders kept a close watch on Sino-U.S. trade talks in Washington between the world’s two largest economies.

Spot July rose 100 points to 86.03 cents, in the upper quarter of its 124-point range from 85.05 to 86.29 cents on a contract volume of 4,726 lots. December gained 93 points to 82.38 cents, trading within a 111-point range from 81.34 to a new contract high — its second straight — at 82.45 cents on a turnover of 6,250 lots.

China denied it had offered to cut its trade surplus with the United States by up to $200 billion, hours after it dropped an anti-dumping probe into U.S. sorghum imports, but added that talks were constructive.

In ICE cotton futures Thursday, July settled on a moderate gain back above its nine-day and 18-day moving averages, while December climbed to a new contract high and finished on a new contract high close.

The inverted July-December straddle traded between 354 and 399 points and narrowed eight points to settle at a 358-point July premium on a volume of 5,392 lots. December-March traded between an inverted one point to 20 points and narrowed 11 points to close at a nine-point December premium on a volume of 3,368 lots.

Cash online grower-to-business sales of 3,392 bales changed hands at an average of 69.95 cents per pound on The Seam, while business-to-business sales of 3,887 bales brought 66.67 cents a pound. Staples 35 or more accounted for 3,392 bales or 88% of the G2B sales and 2,851 bales or 73% of the B2B sales. All the sales were from the Southwest. Cash offerings were 61,947 bales.

The Cotlook A Index of world values gained 45 points to 92.50 cents, narrowing the premium over the prior-day July futures settlement 14 points to 8.15 cents.

In outside markets, Dow Jones Industrial Average futures ticked down 10 points and S&P 5.50 points as markets awaited clarity over progress on the U.S.-China trade talks. U.S. dollar index futures edged higher with Treasuries, ticking up 0.250 or 0.27% to 93.625.

West Texas Intermediate crude oil dipped 10 cents to $71.39 and Brent oil gained 50 cents to $79.70. June gold dropped $4 to $1,285.40. July corn was up 1.01%, July soybeans up 0.45% and July Kansas City wheat up 1.16%.

Asian stocks closed higher, up 0.4% in Japan’s Nikkei 225, 0.34% in Hong Kong’s Hang Seng, 0.5% in South Korea’s Kospi and 1.2% in China’s Shanghai Composite. European shares traded down, slipping 0.33% in Britain’s FTSE 100, 0.17% in Germany’s DAX and 0.04% in France’s CAC 40.

China’s Zhengzhou cotton futures again closed on large gains and strength persisted on the China National Cotton Exchange. India’s MCX cotton futures rose.

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