May has posted four straight triple-digit closing moves. All the cotton offered sold in the opening round of ChinaΆs auctions of supplies from its government-owned stockpile.
Cotton futures settled on some new contract high settlements Monday, extending the late-day rally of the previous session.
Benchmark May settled up 112 points to 79.11 cents, in the upper quarter of its 146-point range from up a point at 78 cents to up 147 points at 79.46 cents. It opened at 78.15 overnight, dipped to the low in the first minutes of trading and hit the high around 9 a.m. CST.
May has finished on triple-digit moves four consecutive sessions, three of which have been on the upside, for a net gain of 277 points.
Maturing March, where the last trading day is Thursday, settled up 111 points to 78.39 cents. It has posted the highest price on a daily continuous chart since June 2014.
July closed up 114 points to 79.97 cents, trading within a 139-point range from 78.88 to a new contract high at 80.27 cents. December set a new contract high at 75.50 and closed just below that at 75.44 cents, up from the overnight low of 74.85 cents.
Volume quickened to an estimated 30,117 lots from 23,023 lots the previous session when spreads accounted for 9,074 lots or 40%, EFS 1,000 lots and EFP 406 lots. Options volume increased to 5,525 lots — 2,337 calls and 3,188 puts — from 1,721 lots.
A vigorous response to the opening round of auctions from ChinaΆs government-owned stockpile may have helped to push the market higher in the overnight session.
All the offerings of 30,169 metric tons (138,600 480-pound bales) were bought. The sales are scheduled to continue each business day through at least Aug. 31. A strong early response had been mostly expected.
Chinese mill buyers were believed to have purchased only their more pressing requirements in advance of the auctionsΆ commencement, Cotton Outlook had reported in a monthly review.
Quality of the cotton expected to be offered had remained the subject of conjecture, Cotton Outlook said, but added that the general consensus was that it was expected to be primarily of lower grade cotton and thus of particular interest to spinners of medium to lower yarn counts.
The high quality of the U.S. 2016 crop is considered an important factor in U.S. export sales to China this season. As of Thursday, U.S. all-cotton sales for shipment to China this season totaled 1.779 million running bales, second only to VietnamΆs 1.981 million RB.
An increase in the U.S. export estimate is generally expected in USDAΆs updated supply-demand report on Thursday. Cumulative sales have exceeded year-ago bookings by 4.5 million RB and have reached about 93% of USDAΆs February export projection.
Futures open interest fell 3,250 lots Friday to 269,746, with MarchΆs down 43 lots to 35, MayΆs down 307 lots to 161,401, JulyΆs down 918 lots to 51,097 and DecemberΆs down 2,190 lots to 49,942. Certified stocks grew 265 bales to 325,421.
