DTN Cotton Open: In Red on Hefty Early Volume

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Net U.S. upland export sales came in at 34,800 RB for this season and 226,700 RB for next season. Upland shipments remained strong at 459,900 RB. Cash grower online sales saw 320 bales change hands on The Seam at an average of 62.57 cents per pound.

Cotton futures traded lower on hefty early dealings Thursday amid ongoing weakness in the grains complex after U.S. weekly upland export sales came in light for this season and beat expectations for next season. Shipments remained strong.

July ticked down 76 points to 93.05 cents, trading within a 170-point range between 92.80 and 94.50 cents on a contract volume of 3,360 lots. December dropped 87 points to 92.06 cents, trading within a 171-point range between 91.62 and 93.33 cents on a turnover of 10,879 lots.

Net upland export sales for shipment this season of 34,800 running bales during the week ended last Thursday were up from 6,800 RB the prior week but down 39% from the four-week average, USDA reported.

Gross sales were 84,900 RB and cancellations were 50,100 RB. Sales went to 14 countries, led by Vietnam, Turkey, Peru, Indonesia and South Korea. Net upland sales for next season of 226,700 RB, up from 106,800 RB the week before, went to 13 countries, led by China (107,600 RB), Bangladesh, Vietnam and El Salvador.

Upland shipments of 459,900 RB fell 20% from the prior week’s marketing year high but were up 4% from the four-week average. Shipments went to 26 countries, headed by Vietnam, Turkey, Indonesia, China and Thailand.

Pima net sales totaled 7,700 RB for this season, down 42% from the 42 from the previous week and 19% from the four-week average. New-crop sales of 32,400 RB were up from 14,500 RB the week before. Shipments of 9,300 RB rose by 11% from the previous week but fell 24% from the four-week average.

In ICE cotton futures Wednesday, the market settled on mostly fractional gains except for a triple-digit loss in spot July and a triple-digit gain in “red” December 2019.

The inverted July-December straddle traded between 54 and 230 points and narrowed 143 points to close at an 88-point July premium on a bulging 19,130 lots. December-March traded between an inverted nine and 17 points and settled unchanged at an 11-point December premium on 4,681 lots.

Cash online trading saw 320 bales change hands on The Seam’s grower-to-business exchange and 893 bales on the business-to-business platform at prices averaging 62.57 and 65.70 cents, respectively. Included in the grower sales were 145 bales from the domestic mill area in the Southeast and 175 bales from the Southwest.

The Southeast sales went for an average of 81.50 cents, with all but six bales stapling 35 or more, and the Southwest sales for 46.88 cents, with 51 bales or 29% in comparable staples. All the business sales, of which 666 bales or 75% stapled 35 or more, were from the Southwest. Offerings were 26,513 balesw.

World values as measured by the Cotlook A Index gained 105 points to 101.70 cents. The index premium over the prior day’s July futures settlement widened 59 points to 6.49 cents.

In outside markets, Dow Jones Industrial Average futures ticked up 88 points and S&P futures up 8.50 points, while U.S. dollar index futures gained 0.455 to 94.155.

West Texas Intermediate crude oil gained 48 cents to $67.12 and Brent crude added 5 cents to $76.79. August gold traded up $7.50 to $1,308.80. July corn was down 1.4%, July soybeans down 0.43% and July Kansas City wheat down $1.95.

Asian stocks closed lower, down 0.99% in Japan’s Nikkei 225, 0.93% in Hong Kong’s Hang Seng, 1.8% in South Korea’s Kospi and 0.17% in China’s Shanghai Composite. India’s Sensex dropped 0.39%. European shares were trading lower, down 0.25% in Britain’s FTSE, 0.3% in Germany’s DAX and 0.09% in France’s CAC 40.

China’s Zhengzhou cotton futures closed mostly lower, trading was light on the China National Cotton Exchange and India’s MCX cotton futures were lower.

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