DTN Cotton Open: Ticks Quietly Slightly Lower

    Emerging cotton seed. ©Debra L Ferguson Stock Photography

    U.S. jobs grew 164,000 in April and unemployment fell to 3.9%. Cash online sales rose to 4,889 bales on The Seam, of which grower sales were 2,387 bales.

    Cotton futures ticked slightly lower in quiet early dealings Friday, with July positioned for a small loss for the week.

    July hovered down 31 points to 84.19 cents, trading within a 68-point range from 84.70 to 84.02 cents on a contract volume of 2,572 lots. It closed at 84.51 cents last Friday. December dipped 17 points to 79.42 cents, trading within a tiny 31-point range between 79.30 cents and 79.61 cents on a turnover of 836 lots.

    In ICE cotton futures Thursday, July closed on a small loss, failing to hold above 85 cents on its second straight probe just above that to the highest price since the April 23 reversal down from 85.39 cents, now key resistance.

    The inverted July-December spread traded from 546 to 454 points and narrowed 34 points to settle at a 491-point July premium on a volume of 3,607 lots. December-March traded from an inverted 46 to 59 points and widened three points to close on a 50-point December premium on 722 lots.

    Cash online sales rose to 4,889 bales from 4,728 bales on The Seam. Prices increased to an average of 69.85 cents from 65.35 cents, reflecting gains to 20.34 cents from 17.37 cents in premiums over loan rates. Offerings were 102,254 bales.

    Grower-to-business sales of 2,387 bales and business-to-business sales of 2,502 bales brought prices averaging 71.17 and 68.60 cents per pound, respectively. The grower sales included 395 bales from the Mid-South and 1,992 bales from the Southwest that sold for averages of 84.73 cents and 68.48 cents per pound, respectively. All business sales were from the Southwest. Staples 35 or more accounted for 91% of the G2B sales and 2,111 bales or 84% of the B2B sales.

    The Cotlook A Index of world values gained 25 points to 93.50 cents, widening the premium over the July futures settlement the previous day by five points to 8.82 cents.

    In the news, the U.S. economy steadily created jobs in April while the jobless rate fell to the lowest level since late 2000, suggesting available workers are becoming scarcer in a tightening labor market, Dow Jones Newswires reported.

    Employers added 164,000 jobs in April, a pickup from March and more than enough to keep up with population growth, the Labor Department said. The jobless rate, calculated from a separate survey of households, fell to 3.9% from 4.1% a month earlier, hitting the lowest rate since December 2000, toward the end of the tech boom.

    But in an ongoing mystery, workers’ wages continued to growth sluggishly in spite of the historically low unemployment rate. Wages grew 4 cents over the month and 2.6% over the past year, strong enough to keep paychecks slightly ahead of cost-of-living increases. Economists had expected 175,000 new jobs in April and the jobless rate to fall to 4%.

    In outside markets, U.S. stock index futures initially trimmed losses on the heels of the jobs report, but the Dow Jones Industrial Average still traded down 100 points and S&P futures down 10.25 points. U.S. dollar index futures ticked up 0.095 to 92.345.

    West Texas Intermediate crude oil gained 29 cents to $68.72 and Brent crude added 23 cents to $73.85. June gold traded up $1.60 to $1,314.30. July corn was down 0.31%, July soybeans down 1.09% and July Kansas City wheat down 1.28%.

    Asian stocks closed lower ahead of the U.S. jobs report, down 1.28% in Hong Kong’s Hang Seng, 1.04% in South Korea’s Kospi and 0.32% in China’s Shanghai Composite. India’s Sensex dropped 0.53%. European shares traded mixed, up 0.34% in Britain’s FTSE 100, 0.33% in Germany’s DAX and down 0.21% in France’s CAC 40.

    China’s Zhengzhou cotton futures closed with additional gains and prices settled mixed on the China National Cotton Exchange.

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