Most actively traded contracts hit new highs beyond soon-to-mature March. National Cotton Council survey showed producers intend to boost 2017 acres 9.4%. Hedge funds raised net longs to four-week high. Online cash sales increased to 15,240 bales on The Seam.
Cotton futures surged to triple-digit old-crop gains and new contract highs in the most actively traded deliveries beyond soon-to-mature March on heavy volume for this time of day Monday.
March hovered up 105 points to 76.87 cents, trading within a 106-point range from 75.89 to 76.95 cents on a contract volume of 8,068 lots. This is the last day of the big Goldman Sachs index fund roll from March.
May ticked up 115 points to 78.24 cents on a turnover of 8,459 lots. July gained 107 points to 79.01 cents on 1,187 lots and December traded up 32 points to 74.32 cents on 1,116 lots. May, July and December posted new contract highs at 78.33, 79.07 and 74.50 cents, respectively.
In weekend news, the National Cotton Council’s much-watched early season survey showed U.S. producers intend to increase 2017 cotton plantings 9.4% to 11 million acres. Survey results were released at the annual NCC meeting in Dallas.
In outside markets, U.S. dollar index futures traded up 0.100 to 100,800, while Dow Jones futures ticked up 56 points and S&P futures five points following record high closes on Wall Street on Friday.
Crude oil dropped 45 cents to $53.41, Brent crude slipped 56 cents to $56.50 and February gold dropped $8.20 to $1,226.20. March corn was down 0.3%, March soybeans 0.6%, March Chicago wheat 0.8% and March Kansas City wheat 0.4%.
Earlier, Asian stock markets were higher, up 0.4% in Japan’s Nikkei 225, 0.6% in China’s Shanghai Composite, 0.6% in Hong Kong’s Hang Seng and 0.2% in South Korea’s Kospi. European markets rose amid upbeat European Union forecasts. Germany’s DAX gained 1.1% and France’s CAC 40 advanced 1.4%. Britain’s FTSE added 0.2%.
China’s Zhengzhou cotton futures and prices on the China National Cotton Exchange finished higher.
Meanwhile, trend-following funds boosted their net longs 6,303 lots to 110,567 in cotton futures-options combined during the week ended Tuesday, according to supplemental traders-commitments data reported by the Commodity Futures Trading Commission after the close Friday.
That was a four-week high, a bit shy of the record high net longs of 110,898 lots on Jan. 10. Index funds raised their net longs 4,527 lots to 71,453, while traders with non-reportable positions hiked theirs 956 lots to 10,964.
Commercials sold 11,788 lots, adding 11,507 longs and covering 281 shorts to raise their net shorts to 192,968. Combined open interest increased 8,573 lots to 347,494.
In cotton futures Friday, March slowed slightly higher for a third session but lower for the week. This snapped a string of gains three weeks in a row and five of the last six. March options expired without fireworks.
The March-May spread traded from 113 to 134 points carry and widened 20 points to settle on a new low finish at 127 points on a volume of 24,200 lots. May-July traded from 66 to 86 points carry and widened nine points to a new low close at 85 points on 6,606 lots.
The inverted July-December intercrop spread traded from 350 to 410 points and widened 59 points to a 384-point July settlement premium on 1,756 lots.
In cash online trading, overall sales increased to 15,240 bales from 10,018 bales on The Seam. Prices averaged a gross 71.34 cents, up from 70.67 cents, reflecting a 22-point drop to 18.11 cents in premiums over loan repayment rates.
World values as measured by the Cotlook A Index gained 25 points to 85.15 cents, down 110 points from a week ago.