Prices remained within prior-session ranges as traders awaited the delayed weekly export sales-shipments report. Market took in stride fresh trade war fears.
Cotton futures finished on moderate gains Thursday on inside-range price action as traders awaited the delayed U.S. weekly export sales report.
July closed up 66 points to 93.15 cents, in the upper third of its 201-point range from down 76 points at 91.74 to up 125 points at 93.75 cents. December settled up 79 points to 91.64 cents, around the upper quarter of its 222-point range from 89.98 to 92.20 cents. For the month, July gained 9.31 cents or 11.1% and December jumped 12.86 cents or 16.3%.
Volume dipped to an estimated 59,100 lots from a huge 102,792 lots the prior session when spreads accounted for 43,995 lots or 43%, EFS 1,500 lots and EFP 1,776 lots. Options volume slipped to 25,887 lots (16,089 calls and 9,798 puts) from 48,854 lots (29,242 calls and 19,612 puts).
The USDA’s export sales-shipments report on Friday will be for the week ended May 24, a period in which July traded from 85.05 to what was at the time a new contract high of 89.88 cents and December from 81.34 to its new then-high of 85.74 cents.
Net upland sales for shipment this season fell the prior week to a marketing year low of 50,700 running bales and new-crop upland sales to a six-week low to 152,200 RB. Upland sales the last four weeks have averaged 146,700 RB for this season and 227,300 RB for next season.
The four-week average for upland shipments stands at 442,200 RB, well ahead of the pace needed to achieve the USDA forecast and up from the previous four-week average of 433,800 RB.
The market took in stride fresh trade war fears and how they could affect global cotton mill use and world cotton trade. The United States said it will impose tariffs on aluminum and steel imports from Canada, Mexico and the European Union after saying on Tuesday it still held the threat of imposing tariffs on $50 billion of imports from China unless it addressed the issue of theft of American intellectual property.
Robust export sales have been associated with USDA’s initial projections that world 2018-19 cotton consumption will rise for the seventh consecutive season to a new record, continuing the recovery that began in 2012-13.
Mill use is forecast at 125.4 million bales, exceeding production for the third time in four years. Together, China, India and Pakistan — the leading spinners of raw cotton — are projected to account for 62% of the total, similar to 2017-18.
Certified stocks increased 218 bales to 74,361 on Wednesday, the exchange’s daily report showed. There were 306 newly certified bales and 88 bales decertified. Awaiting review were 1,701 bales at Galveston. Open interest grew 5,914 lots to 312,844, with July’s down 3,465 lots to 109,211 and December’s up 7,062 lots to 156,603.
