Open interest increased 3,715 lots as the market jumped last week and the CFTC on-call report showed a still-large imbalance in mill and producer unpriced positions. U.S. 2017-crop upland loans outstanding declined to 4.144 million RB.
Cotton futures extended last week’s strong gains Monday, led by most-active May as it finished above highs of the previous four weeks.
May settled up 81 points to 82.15 cents, in the upper quarter of its 152-point range from up 118 points at 82.52 to down 34 points at 81 cents. It touched the high in the overnight session, dipped to the low during morning trading, and climbed to a high of 82.27 cents on the way to the finish.
Maturing March closed up 25 points to 81.70 cents, July settled up 68 points to 82.75 cents and December finished up 27 points to 76.87 cents after hitting a new contract high at 76.95 cents. That was December’s second contract high in a row and the third in the last three sessions. The other contract months settled up 25 points to down five points.
Volume rose to an estimated 35,000 lots from 29,647 lots the previous session when spreads accounted for 9,936 lots or 34%, EFS 1,004 lots and EFP 98 lots. Options volume rose to 9,027 lots (6,816 calls and 2,211 puts) from 6,916 lots (3,688 calls and 3,228 puts).
A 3,715-lot increase in open interest as the market jumped last week, suggestive of fresh fund buying, and a still-large imbalance reported in unpriced mill-producer on-call positions contributed to follow-through price action.
Unpriced mill sales based in May declined 2,000 lots to 33,128 during the week ended Feb. 16, according to on-call data reported by the Commodity Futures Trading Commission after the close Friday. The unpriced producer position increased 422 lots to 2,329.
This resulted in the net call difference narrowing 2,422 lots to 30,799, 25.58% of May’s rising open interest, and a ratio of potential buying to potential selling of 14.22:1. A sizable portion of the unpriced mill sales is believed hedged in options.
In the remaining 2017-18 marketing year contracts of March, May and July, the unfixed call positions were down 7,986 lots to 77,571 for mills and 1,542 lots to 8,764 for producers. The net call difference narrowed 6,444 lots to 68,807, which was 36.7% percent of the open interest.
Meanwhile, U.S. 2017-crop upland loans outstanding declined 122,440 running bales to 4.144 million RB during the week ended last Monday, according to the latest USDA figures.
Loan repayments were made on 202,316 RB and entries were 79,876 RB. Outstanding loans included 340,993 RB of Form A issued to individual growers and 3.803 million RB issued to marketing cooperatives or loan servicing agents.
Futures open interest rose by 1,709 lots to 258,409 on Friday, with March’s down 541 lots to 240 and May’s up 922 lots to 129,247. Certified stocks grew 7,834 bales to 101,222. Deliverable stocks a week earlier were 254,694 bales. Awaiting review were 786 bales at Galveston.