Weekly export sales data scheduled Friday. Strengthening of El Nino could mean wetter-than-normal conditions continue into spring, says Texas climatologist. World prices rose slightly for the program week.
U.S. cotton futures closed slightly ahead in quiet dealings Thursday, remaining within Monday’s bullish outside-range reversal in spot March.
- March edged up 12 points to close at 62.09 cents, in the middle of its 70-point range from down 22 points at 61.75 to up 48 points at 62.45 cents. Gains in U.S. equities and oil prices offered support.
- May closed up 18 points to 62.46 cents, while December gained 16 points to settle at 62.36 cents.
- Some traders expect the U.S. upland export sales report, set for release on Friday for the week ended Jan. 14, to range from slightly below to a bit above the prior weekΆs 171,000 running bales. Upland sales the last four weeks have averaged 119,675 RB and shipments have averaged 131,802 RB.
- Volume slowed to an estimated 20,842 lots from 26,251 lots the previous session when spreads accounted for 10,049 lots or 38%, EFP 207 lots and EFS 70 lots. Options volume totaled 4,429 calls and 1,424 puts.
On the weather outlook, a further strengthening of El Nino likely will mean wetter-than-normal conditions continue into spring, says John Nielsen-Gammon, state climatologist at Texas A&M University.
“ThereΆs the possibility that this El Nino, although itΆs already pretty strong, is actually going to strengthen a bit more because of the wind patterns in the Pacific Ocean,” he said in an Extension Service report. “You can think of the tropical Pacific as a giant bathtub, and the winds blow the warm water typically over toward the far west end.
“When those west winds weaken and even reverse, thatΆs what causes El Nino. The winds bring the warm water over to the east, toward South America. And recently weΆve had an increase in those west-to-east winds. ThatΆs going to reinforce the effects of El Nino.”
Long-range predictions for summer conditions always are a gamble, he said. But thereΆs some evidence that the current strong El Nino will be followed by its counterpoint, a strong La Nina. This would mean next winter would be dry.
Closer by, wet conditions likely will continue another few months, Nielson-Gammon said, with elevated chances of rain through May, especially in the northern part of Texas.
The traditional optimum cotton planting period opens May 5 on the Texas High Plains, which last year turned out 70% of the stateΆs fiber crop production.
On the competitive-pricing scene, the average of the five lowest-priced world growths for the Far East edged up 11 points to 66.76 cents during the week ended Thursday, according to USDA calculations, while the lowest-quoted U.S. cotton landed there held steady at 70.65 cents.
The U.S. premium thus narrowed 11 points to 3.89 cents. The weekly adjusted world price is figured at 47.01 cents, up from 46.90 cents, resulting in a marketing loan gain for the program week beginning Friday of 4.99 cents, down from 5.10 cents. A fine count adjustment of eight points will apply to 2015-crop qualities better than 31-3-35.
Futures open interest increased 1,510 lots Wednesday to 188,857, with MarchΆs down 220 lots to 115,516 and MayΆs up 434 lots to 35,170. Cert stocks declined 356 bales to 61,233.
