Trend-following funds sold 13,198 lots to reduce their net longs the fourth straight week. Cash online sales rose to 2,893 bales on The Seam. Basis strengthened in West Texas.
Cotton futures bounced to modest gains in early dealings Monday after slipping narrowly to new old-crop lows for the move in the first minutes of overnight trading.
Spot May hovered up 32 points to 73.78 cents, trading within a 54-point range from 73.35 to 73.89 cents on a contract volume of 5,185 lots. July gained 36 points to 75.83 cents on a turnover of 4,413 lots and December added 21 points to 72.50 cents on 1,155 lots.
In outside markets, U.S. dollar index futures ticked little changed, down 0.015 to 101.130, while Dow Jones futures eked up 4 points and S&P futures up a point. Crude oil traded up 54 cents to $52.78, Brent crude added 60 cents to $55.84 and June gold dropped $6.80 to $1,205.05. May corn was up 0.6%, May soybeans up 0.05%, May Chicago wheat up 0.1% and May Kansas City wheat down 0.2%.
Earlier, Asian stocks were mostly lower, up 0.71% in Japan’s Nikkei 225 but down 0.02% in Hong Kong’s Hang Seng, 0.86% in South Korea’s Kospi and 0.5% in China’s Shanghai Composite Index. European stocks traded mostly slightly lower, down 0.08% in Britain’s FTSE, 0.14% in Germany’s DAX and 0.45% in France’s CAC 40.
China’s Zhengzhou cotton futures settled 100 yuan higher and prices also ended higher on the China National Cotton Exchange.
Meanwhile, trend-following funds sold 13,198 lots in cotton futures-options combined during the week ended Tuesday, liquidating 11,019 longs and adding 2,179 shorts to reduce their net longs 12.1% to 95,559 lots. This was the fourth straight week they have cut their net long position.
Index funds sold an additional 2,959 lots to cut their net longs to 65,543 lots, the weekly supplemental traders-commitments report from the Commodity Futures Trading Commission also showed after the close Friday. Traders with non-reportable positions sold 4,424 lots to whack their net longs down to 695 lots.
Commercials bought 20,581 lots, covering 11,850 shorts and adding 8,731 longs to chop their net shorts to 161,796. Combined open interest dropped 4,481 lots to 325,125. Prices lost 203 points for the reporting week, basis May.
In futures only, non-commercials reduced their net longs 5.1 percentage points to 36.6% of the open interest. They sold 15,400 lots to lower their net longs to 101,480 lots. Open interest fell 4,178 lots to 277,475.
In futures Friday, May lost 105 points for the day and 387 points for the week to settle at its lowest finish since Jan. 19. It has shed 600 points from its March 6 contract high.
The May-July switch traded from 180 to 208 points carry and widened 12 points to close at the widest carry thus far at 201 points on a volume of 21,736 lots. Inverted July-December traded from 333 to 279 points and widened five points to close at 318 points on 3,878 lots. December-March flipped to close at 20 points carry — the first March/over settlement since Feb. 2 — from a nine-point inversion on 340 lots.
In cash online trading, sales increased to 2,893 bales from 1,160 bales on The Seam. Prices rose to a gross average of 71.57 cents from 71.14 cents, reflecting gains to 21.76 cents from 20.71 cents in premiums over loan values.
For the week, the basis on the base quality firmed 25 points in the Southeast to 100 points off May futures and gained 212 points to 71 points off in East Texas-Oklahoma and West Texas.
The Cotlook A Index of world values eased five points to 85.55 cents, widening the premium over the prior-day May futures settlement 31 points to 10.99 cents.