DTN Cotton Open: Down Triple Digits on Heavy Early Volume

    ©Debra L Ferguson Stock Photography

    Daily trading limit expanded to 500 points. U.S. crop 62% planted, up from the five-year average of 59%. Cash online grower sales of 3,134 bales brought an average of 69.86 cents a pound on The Seam.

    Cotton futures swung from triple-digit gains overnight to triple-digit losses on heavy volume in early dealings Wednesday.

    Spot July shed 185 points to 91.36 cents, near the low of its wide 518-point range from 96.40 to 91.22 cents on a whopping contract volume of 18,292 lots. December lost 143 points to 89.22 cents, also near the low of its 473-point range from 93.73 to 89 cents on a turnover of 17,801 lots.

    The futures daily trading limit is expanded to 500 points on Wednesday from 400 points after a batch of contracts locked up the 4-cent limit the prior session, ICE announced.

    On the crop scene, U.S. planting slowed to a pace of 10 percentage points to 62% completed during the week ended Sunday, up a point from last year and three points from the five-year average, USDA’s progress report showed after the close Tuesday.

    Seven percent of the crop was squaring, compared with 6% last year and 3% for the average. Planting in Texas reached 51% done, up from 43% a week earlier, 51% last year and 47% on average. Squaring at 11% was even with last year but behind the average of 6%.

    Progress in Georgia reached 65% planted, behind 73% last year and 71% on average. Planting lagged state averages by a point at 76% in Alabama, nine points at 70% in North Carolina and five points at 68% in South Carolina. Progress in all other cotton states was ahead of average.

    In ICE cotton futures Tuesday, the market finished up the 400-point daily limit through July 2019 amid weather concerns in the United States and China. Spot July ended at a new four-year high of 93.21 cents and December settled at 90.65 cents. Synthetic values via options for informational purposes closed at 94.21 cents in July, 91.65 cents in December and 91.07 cents in March.

    The inverted July-December straddle traded between 220 and 357 points and settled unchanged at a 256-point July premium when both closed limit up. December-March traded between an inverted 29 and 79 points and also finished unchanged at a 41-point December premium on limit-up settlements on 1,388 lots.

    Cash online grower-to-business sales increased to 3,134 bales on prices averaging 69.86 cents per pound on The Seam, while business-to-business sales fell to 338 bales and brought an average of 76.50 cents. Staples 35 or more accounted for 2,733 bales or 87% of the G2B sales and 286 bales or 85% of the B2B sales. All the sales were from the Southwest. Offerings were 42,228 bales.

    The Cotlook A Index gained 175 points to 96.70 cents, again leaving the premium over the prior-session July futures settlement unchanged at 7.49 cents.

    In outside markets, Dow Jones Industrial Average futures ticked up 129 points and S&P futures up 129 points after their worst day in a month owing to a political crisis in Italy. U.S. dollar index futures traded down 0.530 to 94.260.

    July West Texas Intermediate crude oil gained 41 cents to $67.12 and July Brent crude added 71 cents to $76.10. June gold traded up $2.40 to $1,300.40. July corn was down 0.69%, July soybeans down 0.56%, and July Kansas City wheat down 1.57%.

    Asian stocks closed lower, down 1.5% in Japan’s Nikkei 225, 1.4% in Hong Kong’s Hang Seng, 1.96% in South Korea’s Kospi and 2.5% in China’s Shanghai Composite. European stocks traded higher after one of their worst selloff in years. Britain’s FTSE 100 gained 0.27%, Germany’s DAX 0.65% and France’s CAC 40 0.41%.

    China’s Zhengzhou cotton futures continued to rise and prices settled with large gains on the China National Cotton Exchange. India’s MCX cotton futures declined sharply but local prices rose further.

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