June 07 2017
DTN Cotton Close: Finishes Narrow-Range Session Mixed
U.S. upland producers came into June with 8% of their expected acreage under contract. Weekly export sales-shipments report eyed.
Cotton futures settled mixed in narrow-range price action Wednesday, down 23 to up 33 points, with spot July closing with the only loss.
July closed at 75.79 cents, a new low finish since April 7. It traded within a 57-point range from up 20 points at 76.22 to down 37 points at 75.65 cents, a new low since April 10.
December edged up 16 points to 72.68 cents, just above the midpoint of its mere 41-point range from 72.40 to 72.81 cents. It posted a five-session low and the lowest high in six sessions.
Volume slowed to an estimated 28,342 lots from 32,621 lots the prior session when spreads accounted for 16,807 lots or 52%, block trades 2,000 lots, EFP 59 lots and EFS 13 lots. Options volume rose to 8,415 lots (4,043 calls and 4,372 puts) from 4,891 lots (2,936 calls and 1,955 puts).
U.S. upland producers came into June having forward contracted about 8% of their expected acreage, compared with only 1% last year and the highest since bookings of 11% in 2013. The 10-year high is 28% in 2011.
The estimates were based on informal surveys by the cotton division of USDA’s Agricultural Marketing Service and the March prospective plantings compiled by the National Agricultural Statistics Service.
Contracting has been most active in the Southeast where growers had booked about 12%, up from 2% a year earlier. That was the same percentage as in 2014 but well shy of 29% in 2013 and 31% in 2011.
Mid-South producers contracted about 10%, compared with 7% in 2016 and the highs of 29% in 2012 and 66% in 2011. Growers in the Southwest had 6% under contract, compared with less than 1% last year, 16% in 2012 and 18% in 2011. Growers in the West had booked 4%, against none a year ago, the 10-year high of 28% in 2011 and the next highest of 11% in 2013.
The estimates don’t include what is believed to be a large acreage consigned to marketing organizations but do include cotton contracted with them.
Meanwhile, some expectations for U.S. upland export sales for the week ended June 1 for shipment this season range slightly on either side of the prior week’s 110,900 running bales. The USDA report is scheduled for release at 7:30 a.m. CDT on Thursday.
Upland 2016-17 sales have averaged 102,084 RB the last four weeks and all-cotton commitments have reached more than 102% of the USDA estimate.
Upland sales for shipment next season were 159,600 RB the week ended May 25 and have put up a strong four-week average of 176,800 RB. All-cotton export commitments for 2017-18 already have climbed to 3.083 million RB, 23% of USDA’s initial projection.
Upland shipments have maintained a robust pace the last four weeks on rounded exports totaling 1.504 million RB for an average of 376,000 RB.
Futures open interest declined 3,138 lots to 234,798 on Tuesday, with July’s down 5,527 lots to 73,794, December’s up 1,990 lots to 133,603 and March’s up 235 to 18,020.
Certified stocks grew 5,307 bales to 445,307, up from 445,351 bales at the end of May. Awaiting review were 9,970 bales, including 1,936 at Galveston and 8,034 at Memphis.