Cotton Futures Close Higher
Cotton futures closed higher Tuesday on modest noncommercial buying and slightly more bullish opinions about new crop prices.
May cotton futures started moving higher in the wee hours of the morning Tuesday and continued on that path throughout the day session, closing at 87.33, up .61 and .41 cents off the dayΆs high. Noncommercials were modest buyers. The July contract traded in a similar pattern, closing up .67 at 88.16, just .33 cents off the dayΆs high.
The nearby May-to-July spread widened from .77 to .83 contango, indicating light commercial selling and a continued bearish commercial outlook. The backwardation in the December to March 2014 spread strengthened from 0.58 to 0.87. A strengthening backwardation implies commercials are becoming more bullish new crop. The seasonal index for cotton is that prices move sideways through March and then sharply lower into April.
In outside markets, corn closed 3 cents higher in the May and 3 cents higher in the July. Soybeans closed 10 3/4 cents lower in the May and 9 cents lower in the July. Wheat closed 3 1/2 cents higher in the May Chicago, 1 cent lower in the May Kansas City, and 2 1/2 cents lower in the May Minneapolis. The U.S. dollar index is 0.030 higher at 82.603. April gold is $14.00 higher at $1,592.00 while May silver is $0.342 higher and May copper is $.0344 higher. The Dow Jones Industrial Average is 24 points lower at 14,423. April crude oil is $0.48 higher at $92.54. April heating oil is $.0197 lower while April RBOB gasoline is $.0039 lower and April natural gas is $0.012 lower.
CotlookΆs A Index for today is down .05 at 93.45 cents/pound. For the week the index is .45 higher. The average price reported at The Seam is 79.75 on total bales sold of 2,470.
Weather forecasts in the Mississippi Delta area from Meteorlogix predict dry conditions through tomorrow with highs in the high 60s, lows in the 40s but possibly as low as 28. In the Southeast U.S. showers and thunderstorms tapered off today with dry conditions predicted for tonight through tomorrow. Highs in the upper 60s. Lows 33 to 42.
The National Ag Statistics Service field office in Texas reported that producers in the Low Plains were preparing for cotton planting. Despite moisture from snows last week, the drought monitor map still shows most of the state in some stage of drought, ranging from abnormally dry to exceptional drought. High winds continue to deplete topsoil moisture.
