DTN Cotton Open: Green As Dec. Hits New High

Cotton seedlings. ©Debra L Ferguson Stock Photography

Net U.S. upland weekly export sales for this season fell to a marketing year low of 50,700 RB and shipments dropped to 403,000 RB. New-crop sales were 152,200 RB. Cash grower sales increased to 2,518 bales on The Seam and brought an average of 64.06 cents per pound.

Cotton futures ticked in the green in brisk early dealings Thursday, with July edging above the prior-session high and December rising to a new contract high.

July gained 40 points to 87.37 cents, trading within a 121-point range from 86.64 to 87.85 cents on a contract volume of 6,019 lots. December ticked up 89 points to 84.94 cents, near the high of its 145-point range from 83.75 to 85.20 cents on a turnover of 6,847 lots.

The market shrugged off a slump reported by USDA in U.S. weekly export sales, possibly on tight supply availability, especially for high grades. Shipments remained above the pace needed to make USDA’s 2017-18 projection.

Net upland export sales for shipment this season fell to a marketing year low of 50,700 running bales during the week ended last Thursday, down 67% from the previous week and 76% from the prior four-week average.

Sales went to 17 countries, led by China, Mexico, Taiwan, Indonesia and Ecuador. Gross sales were 73,700 RB and cancellations were 23,200 RB. Cancellations were primarily for Thailand, Japan and the Philippines. New-crop sales of 152,200 RB, down from 229,300 RB, brought combined sales for both crop years to 202,900 RB. Sales for next season went to 10 countries, mainly to China, Thailand, Vietnam and Indonesia.

Upland shipments of 403,000 RB dropped 5% from the previous week and 10% from the four-week average. Exports went to 25 countries, headed by Vietnam, Turkey, Pakistan, China and Bangladesh.

Net sales of Pima of 900 RB for this season were down 54% from the prior week and 83% from the four-week average, while shipments of the extra-long staple cotton of 18,000 RB were up 54% and 76%, respectively.

In outside markets, Dow Jones Industrial Average futures traded down 60 points and S&P futures down 5.25 points. U.S. dollar index futures ticked down 0.205 to 93.715 after release of minutes of the last Federal Reserve meeting Wednesday indicated a gradual approach to interest rate hikes.

West Texas Intermediate crude oil shed 98 cents to $70.86 and Brent crude lost 83 cents to $78.97. June gold gained $8.90 to $1,298.50. July corn was up 0.61%, July soybeans up 0.89% and July Kansas City wheat up 1.22%.

Asian stocks closed mixed, down 1.11% in Japan’s Nikkei 225, up 0.31% in Hong Kong’s Hang Seng, down 0.24% in South Korea’s Kospi and down 0.44% in China’s Shanghai Composite. India’s Sensex gained 0.93%. European shares traded mixed, down 0.24% in Britain’s FTSE 100, 0.19% in Germany’s DAX and up 0.29% in France’s CAC 40.

China’s Zhengzhou cotton futures closed with mostly gains and prices ended mixed on the China National Cotton Exchange. India’s MCX cotton futures were rising.

In ICE cotton futures Wednesday, July settled on a modest loss, extending the prior day’s bearish reversal from its second straight new contract high. December — now with the board’s largest open interest — finished on a slight gain on a second day of inside-range price action.

The inverted July-December spread traded between 286 and 369 points and narrowed 60 points to settle at a 291-point July premium on a volume of 7,978 lots. December-March traded between an inverted 27 and 49 points and narrowed two points to close at a 42-point December premium on 1,984 lots.

Cash online grower-to-business sales increased to 2,518 bales and brought an average of 64.06 cents per pound on The Seam. Business-to-business s+ales edged up to 1,881 bales and averaged 66.80 cents. Staples 35 or more made up 1,553 or 62% of the G2B sales and 1,624 bales or 86% of the B2B sales. All the cotton was from the Southwest. Offerings were 52,120 bales.

The Cotlook A Index of world values dropped 100 points to 94.90 cents, widening the premium over the prior-day July futures settlement seven points to 87.35 cents.

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