DTN Cotton Open: Again Falls to Triple-Digit Losses

©Debra L Ferguson Stock Photography

U.S. crop 76% planted, even with the five-year average. Forty-two percent considered good to excellent, down from 61% last year. Cash grower sales fell to 45 bales on The Seam and business sales increased to 1,766 bales.

Cotton futures extended the prior-session’s bearish reversals in early dealings Tuesday, with spot July and December falling to triple-digit losses for a second day and to five-session lows.

July ticked down 146 points to 90.64 cents, trading within a 195-point range from 92.28 to 90.33 cents on a contract volume of 6,388 lots. December fell 155 points to 89.39 cents, trading within a 223-point range from 90.98 to 88.75 cents on a turnover of 7,426 lots.

On the U.S. crop scene, cotton planting moved up 14 percentage points to 76% completed during the week ended Sunday, two points behind last year but even with the five-year average, according to USDA’s progress report released after the close Monday.

Planting was ahead of the five-year average in all regions except the Southeast where lags included four points at 88% done in Alabama, 12 points at 72% in Georgia, four points at 84% in North Carolina, a point at 85% in South Carolina and four points at 89% in Virginia.

Progress advanced 19 points to 70% planted in Texas, even with last year and up from the average of 67%. Nine percent nationally was squaring, compared with 7% the week before, 10% last year and 6% on average.

The season’s first crop condition ratings showed 42% good to excellent, down from 61% last year; 42% fair, up from 33%; and 16% poor to very poor, up from 6% poor. The DTN cotton condition index of 113 was down from 157 a year ago.

In ICE cotton futures Monday, July and December completed outside-range reversals to the downside, rising above the prior-session highs to triple-digit gains and closing on triple-digit losses below Friday’s lows. July posted its largest one-day loss in 17 sessions and December got within 18 points of its contract high before reversing.

The inverted July-December straddle traded between 92 and 202 points and widened 22 points to close at a 116-point premium on a volume of 8,699 lots. December-March traded between an inverted 24 and 55 points and narrowed 11 points to settle at a 25-point December premium on 3,355 lots.

Cash online grower-to-business sales fell to 45 bales on The Seam, bringing an average of 58 cents per pound, while business-to-business sales increased to 1,766 bales on prices averaging 69.08 cents. All the sales were from the Southwest. Offerings were 24,339 bales.

The Cotlook A Index of world values edged up five points to 100.75 cents, narrowing the premium over the prior-day July futures settlement 10 points to 7.45 cents.

In outside markets, Dow Jones Industrial Average futures inched up six points and S&P futures up a point amid a struggle to keep a risk-on mood going as trade headlines and political risks inspired caution. U.S. dollar index futures gained 0.130 to 94.115 against a basket of currencies.

July West Texas Intermediate Crude oil traded down 29 cents to $64.46 and August Brent crude lost $1.06 to $74.23. July corn was up 0.79%, July soybeans up 0.2% and July Kansas City wheat up 1.87%.

Asian markets closed mostly higher, up 0.28% in Japan’s Nikkei 225, up 0.31% in Hong Kong’s Hang Seng, up 0.25% in South Korea’s Kospi and up 0.75% in China’s Shanghai Composite. India’s Sensex dipped 0.31%. European shares traded mostly higher, down 0.42% in Britain’s FTSE 100, up 1.14% in Germany’s DAX and up 0.68% in France’s CAC 40.

China’s Zhengzhou cotton futures finished limit down. Turnover in the auction of China’s state reserves declined. India’s MCX cotton futures fell.

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