DTN Cotton Close: Mixed on Intercrop Contracts

    ©Debra L Ferguson Stock Images

    U.S. all-cotton export commitments reached 81% of USDA’s 2016-17 estimate on a marketing year high in weekly sales.

    Cotton futures closed mixed Thursday, finishing modestly ahead in current-crop deliveries after U.S. weekly export sales came in much higher than generally expected and slightly lower in deferred contracts.

    March edged up 31 points to close at 74.19 cents, in the lower half of its 126-point range from down 21 points at 73.67 to up 105 points at 74.93 cents. It met hardened resistance as it neared intraday highs this month of 75 and 75.37 cents, viewed by some as a possible “double top.”

    May closed up 18 points to 74.70 cents and July settled up 11 points to 75.25 cents, while December finished down 17 points at 71.46 cents.

    A rally in the U.S. dollar index from a seven-week low may have contributed to keeping a lid on the rally. The looming Lunar New Year holidays, expected to curtail trading for varying lengths in such markets as China, Hong Kong, South Korea and other Asian countries, also may have played a role. The Chinese New Year’s eve is Friday.

    Volume increased to an estimated 28,329 lots from 25,936 bales the previous session when spreads accounted for 15,333 bales or 59%, EFP 484 lots and EFS one lot. Options volume totaled 6,678 calls and 4,587 puts.

    Net all-cotton export sales for shipment this season hit a marketing year high of 463,500 running bales during the week ended Sept. 19, up from 352,700 RB the previous week.

    Export commitments for 2016-17 — outstanding sales of 5.148 million RB plus shipments — rose to 9.859 million RB, 81% of the USDA estimate. This widened the lead over year-ago bookings by 305,000 RB to 4.031 million RB or 69%. A year ago, commitments were 66% of final 2015-16 exports.

    All-cotton shipments of 241,400 RB, up from 238,600 RB the prior week, brought the season’s total to 4.711 million RB, widening the lead over year-ago exports by 79,000 RB to 1.88 million RB.

    Shipments were 39% of the USDA forecast, compared with 32% of final exports at the corresponding point last season. Still, shipments remained behind the pace required to achieve the USDA estimate.

    Exports averaging roughly 264,800 RB a week now are needed to reach the estimate, while weekly sales averaging around only 80,900 RB would match the shipments projection.

    Net sales for shipment next season of 10,400 RB, down from 31,700 RB the previous week, brought 2017-18 commitments to 612,700 RB. The gap behind forward bookings a year ago widened 58,300 RB to 215,400 RB.

    Futures open interest dropped 682 lots Wednesday to 263,646, with March’s down 2,632 lots to 154,180, May’s up 1,278 lots to 53,298 and July’s up 514 lots to 31,677 lots. Merchants appear to have been rolling hedges from March to May and July, sources said.

    Certificated stocks in deliverable position grew an additional 1,643 bales to 127,255, up from 40,470 bales as recently as Jan. 5 and the largest since July 19.

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