DTN Cotton Open: Ticks in Red after Nearing Last Week’s Low

    ©Debra L Ferguson Stock Images

    Spot May confined to the overnight range. U.S. dollar index fell to a new low for the move. Cash grower and business online sales declined to 4,142 bales on The Seam.

    Cotton futures ticked in the red in the early going Tuesday, extending the prior-day losses and after nearing week’s low in spot May.

    May hovered off 30 points to 77.03 cents, trading within a 53-point range from 77.48 to 76.95 cents on a brisk contract volume for this time of day of 5,930 lots. It remained within the overnight range and had fallen to a five-session low. July dropped 24 points to 78.30 cents on 2,031 lots and December dipped 30 points to 75.37 cents.

    In outside markets, U.S. dollar index futures fell to a new low for the move against a basket of six currencies and traded down 0.530 to 99.705, while Dow Jones futures gained 20 points and S&P futures 4.75 points.

    May crude oil edged up 3 cents to $48.94, Brent crude added 18 cents to $51.80 and April gold slipped $1.10 to $1,232.90. May corn was down 0.6%, May soybeans down 0.1%, May Chicago wheat down 0.6% and May Kansas City wheat down 0.8%.

    Earlier, Asian stock markets were mostly higher, though Japan’s Nikkei 225 finished down 0.3%. Hong Kong’s Hang Seng rose 0.4%, China’s Shanghai Composite Index gained 0.3% and South Korea’s Kospi added 1%. In Europe, Germany’s DAX edged up 0.1% and France’s CAC 40 added 0.4%. Britain’s FTSE 100 eased 0.1% lower.

    China’s Zhengzhou cotton futures continued to lose ground and prices settled lower on the China National Cotton Exchange. Sales for the first 11 days of China’s auctions from its reserves have totaled 292,071 metric tons or 1.34 million 480-pound statistical bales.

    In ICE cotton futures Monday, May settled back below its nine-day and 18-day moving averages, negative short-term and intermediate-term technical signals.

    The May-July spread traded from 98 to 124 points carry and widened 19 points to settle at a 121-point July premium on a volume of 4,044 lots. The inverted July-December straddle narrowed 88 points to close at a 287-point July premium on 2,172 lots, trading from 408 to 287 points. Inverted December-March widened a tick to a one-point December settlement premium on 170 lots.

    Unwinding of old-crop, new-crop straddles contributed to December touching a new contract high at 75.72 and settling at 75.67 cents, up four points.

    In cash online trading, grower-to-business and business-to-business sales slipped to 4,142 bales from 4,982 bales on The Seam. Prices rose to a gross average of 73.30 cents from 72.15 cents, reflecting a drop to 20.77 cents from 21.56 cents in gross premiums over loan repayment rates. Offerings were 72,177 bales.

    The Cotlook A Index of world values gained 25 points to 87.70 cents, widening the premium over the prior-day May futures settlement six points to 9.34 cents.

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