DTN Cotton Open: Ticks Higher Prior to Supply-Demand Data

    Rolls of cotton module fabric. ©Debra L Ferguson Stock Images

    U.S. weekly upland export sales topped expectations at 236,000 RB and shipments slipped to 210,500 RB. Cash online grower sales slowed to 10,202 bales and business sales slumped to 322 bales.

    Cotton futures ticked higher Thursday after U.S. weekly export sales topped expectations as traders looked ahead to USDA’s supply-demand report later in the session.

    March hovered up 52 points to 73.67 cents, trading within a 72-point range from 73.08 to 73.80 cents on a contract volume of 2,063 lots. It remained within the range set prior to the export sales report. May gained 49 points to 74.15 cents on a turnover of 744 lots.

    The supply-demand report is scheduled for release at 11 a.m. CST.

    Net upland sales for shipment this season came in a strong 236,000 running bales during the holiday-shortened week ended Jan. 5, rising 29% from the previous week but dropping 15% from the prior four-week average, USDA reported.

    The sales went to 13 countries, headed by Vietnam, China, Turkey, Bangladesh and Indonesia. Gross sales were 239,900 RB and cancellations were 3,900 RB. Sales for shipment next season of 5,700 RB were reported for Mexico.

    Upland shipments of 210,500 RB fell 17% from the previous week and 11% from the four-week average. Shipments went to 22 countries, led by Vietnam, China, Turkey, Indonesia and Thailand.

    Net Pima sales for 2016-17 rose to 10,000 RB from 3,200 the previous week, while shipments of the extra-long staple cotton of 11,700 RB were up 62% from the prior week but down 27% from the four-week average.

    In outside markets, U.S. dollar index futures traded down 0.735 to 101.010, while Dow Jones futures slipped 38 points and S&P futures 5.75 points. Crude oil gained 76 cents to $53.01, Brent crude added 97 cents to $56.07 and February gold traded up $4.70 to $1,201.30. March corn was down 0.6%, March soybeans, up 0.1%, March Chicago wheat down 0.1% and March Kansas City wheat off 0.7%.

    Earlier, Asian stock markets were mostly lower, down 1.2% in Japan’s Nikkei 200, 0.6% in Hong Kong’s Hang Seng and 0.5% in China’s Shanghai Composite Index. In Europe, Germany’s DAX traded down 0.5% and France’s CAC 40 dropped 0.2%. Britain’s FTSE 100 dipped 0.2%.

    China’s Zhengzhou cotton futures settled with mostly losses and prices also finished lower on the China National Cotton Exchange. India’s MCX cotton futures were weak in early trading.

    In ICE cotton futures Wednesday, March settled narrowly mixed in the most actively traded contracts, with March down five ticks. It was the only delivery below unchanged.

    The March-May spread traded from 40 to 53 points carry and widened seven points to settle at 52 points on a volume of 5,072 lots. May-July traded from 41 to 53 points carry and widened six points to close at 51 points on 3,534 lots. The July-December intercrop inversion settled unchanged at 281 points on 483 lots.

    In cash online trading, grower-to-business sales slowed to 10,202 bales from 13,671 bales on The Seam. Prices averaged 68.18 cents, up from 67.16 cents, with premiums over loan repayment rates slipping to 15.31 cents from 15.79 cents.

    Business-to-business sales slumped to 322 bales from 1,268 bales on prices averaging 69.40 cents, down a point, and premiums of 15.65 cents, up 24 points.

    The Cotlook A Index of world values gained 30 points to 82.25 cents, widening the premium over the prior-day March futures settlement 10 points to 9.06 cents.

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