DTN Cotton Open: Slightly Higher After Export Data

Net old-crop export sales cancellations exceeded new sales, fresh new-crop sales increased and shipments slowed. Cash online sales increased to 2,451 bales on The Seam.

Cotton futures traded on slight gains in early dealings Thursday as U.S. old-crop weekly export sales cancellations exceeded gross sales, fresh new-crop sales increased and shipments slowed.

December ticked up 37 points to 84.51 cents, trading within an 83-point range between 84.13 and 84.96 cents on a contract volume of 5,458 lots. July eked up three points to 83.24 cents, trading within a 96-point range between 83.05 and 84.01 cents on a turnover of 96 lots.

Upland 2017-18 export commitments fell a net 112,400 running bales during the week ended last Thursday as cancellations of 170,700 RB exceeded gross sales of 58,300 RB, USDA reported. Reductions were mainly for Vietnam, Indonesia and Hong Kong.

Net upland sales for shipment next season rose to 295,400 RB from 226,700 the prior week and the prior four-week average of 181,000 RB. These went to 11 countries, led by led by China (211,700 RB), Hong Kong and Mexico.

Upland shipments declined to 312,800 RB, down 32% from the prior week and 31% from the four-week average. Shipments went to 25 countries, led by Turkey, Vietnam, Indonesia, Pakistan and Mexico.

Net Pima sales reductions of 200 RB were reported for 2017-18 and net sales of 46,000 RB for 2018-19. Shipments of the extra-long staple cotton of 7,400 RB dropped 20% from the previous week and 36% from the four-week average.

In ICE cotton futures Wednesday, December settled on a modest gain, snapping a three-session string of heavy losses. Still, the declining nine-day MA crossed below the also falling 18-day MA.

The July-December straddle traded between 115 points December/over and 25 points July/over and widened 47 points to close at a 97-point December premium on a volume of 3,923 lots. December-March traded between even money and an inverted 25 points and widened 10 points to settle at a 19-point December premium on 2,663 lots.

Grower-to-business sales of 171 bales and business-to-business sales of the 2,280 bales brought averages of 54.19 and 72.59 cents, respectively, on The Seam. Staples 35 or more accounted for 34 bales or 20% of the G2B sales and 1,393 bales or 61% of the B2B sales. All the cotton was from the Southwest. Offerings were 25,514 bales.

The 2017-18 Cotlook A Index fell 395 points to 93 cents and the Forward A Index 400 points to 83.82 cents. The old-crop premium widened five points and the new-crop index narrowed five points over the prior-day July and December futures settlements.

In outside markets, U.S. stock index futures traded lower as the impact of the ongoing trade spat between the United States and China began to appear in company forecasts. Dow Jones Industrial average futures ticked down 87 points and S&P futures 4.75 points. September U.S. dollar index futures fell 0.105 to 94.620. A media report said Beijing could target U.S. blue-chip firms.

Asian stocks closed mostly lower, up 0.61% in Japan’s Nikkei 225, down 1.35% in Hong Kong’s Hang Seng, down 1.1% in South Korea’s Kospi, and down 1.38% in China’s Shanghai Composite. India’s Sensex dropped 0.32%. European shares were trading lower, down 0.63% in Britain’s FTSE 100, down 0.73% in Germany’s DAX and down 0.44% in France’s CAC 40.

China’s Zhengzhou cotton futures settled with mostly gains and prices ended mixed on the China National Cotton Exchange. Turnover declined further on China’s auction of state reserves.

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