DTN Cotton Close: Finishes Ahead on Light Volume

    Scale mill fixations countered long liquidation. U.S. export commitments reached 109% of the USDA estimate and weekly shipments — though slower — remained above the pace needed to achieve the forecast.

    Cotton futures traded within tight ranges between slight losses and gains and finished on the plus side on light volume Thursday.

    July edged up 21 points to close at 82.82 cents, snapping a string of three consecutive losses. It traded from down 34 points at 82.27 cents to up 35 points and finished in the upper quarter of the 69-point range.

    With just two trading sessions now left before first notice day, May closed up 23 points to 82.97 cents, trading within a 60-point range from 82.56 to 83.16 cents.

    December finished up 27 points to 78.59 cents, its highest close since its contract high settlement at 78.91 cents on Friday. It traded within a 55-point band from 78.19 to 78.74 cents. Thin October, which hadn’t traded in days, traded 31 lots at 79.90 cents and settled up 190 points under exchange rules at 80.66 cents.

    Scale on-call mill fixation buying appeared to have countered long liquidation selling by the speculative community.

    Volume slowed to an estimated 23,800 lots from 28,871 lots the prior session when spreads accounted for 15,129 lots or 52%, EFP 844 lots and EFS 386 lots. Options volume declined to 6,152 lots (2,064 calls and 6,152 puts) from 8,943 lots (5,930 puts and 3,013 puts).

    Net U.S. all-cotton export sales for shipment this season rose to 295,100 running bales during the week ended April 12 from 180,300 RB the prior week and were up 58,100 RB from 237,000 RB in the corresponding week last season, USDA’s weekly report showed.

    Upland net sales of 290,200 RB, up 62% from the previous week but down 2% from the prior four-week average, were near the top of a range of trader expectations from mostly 200,000 to 300,000 RB. Gross sales were 305,200 RB and cancellations were 12,200 RB.

    All-cotton commitments climbed to 15.911 million RB, maintaining a lead of 2.2 million RB or 16% over cumulative sales a year ago and reaching 109% of the USDA forecast. A year ago, commitments were 95% of final 2016-17 exports.

    Net sales of 229,800 RB for shipment next season — all upland — hiked weekly sales for both crop years to a healthy 524,900 RB and raised 2018-19 commitments to 3.125 million RB. New-crop commitments are 951,000 RB or about 44% ahead of forward sales a year ago.

    Commitments for 2018-19 rose to about 20% of the USDA export forecast made at its Agricultural Outlook Forum earlier this year, compared with forward bookings last year of about 15% of the current 2017-18 projection.

    All-cotton shipments slowed to 371,300 RB from 481,000 RB the previous week but remained above the weekly pace required to achieve the USDA estimate. Upland shipments of 362,000 RB slipped 28% on the week and 20% from the four-week average.

    Shipments were 64% of the estimate, compared with 66% of final 2016-17 exports at the corresponding point last year. To achieve the forecast, shipments need to average roughly 336,600 RB a week over the 15-plus weeks remaining in the marketing year.

    Certified stocks grew 86 bales at Memphis on Wednesday to 71,883. Futures open interest declined 3,189 lots to 259,889, with May’s down 4,205 lots to 10,318, July’s down 454 lots to 129,280 and December’s up 1,312 lots to 96,205.

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