July posted largest closing gain since April 18. “Mad rush” to get dryland cotton planted expected when soils dry sufficiently on the Texas High Plains.
Cotton futures surged to the strongest closing gain since April 18 and finished Tuesday on the highest settlement in spot July since May 4.
July closed up 121 points to 62.20 cents, in the upper quarter of its 150-point range from up a point at 61 cents to up 151 points at 62.50 cents. December settled up 109 points to 61.57 cents, trading within a 122-point range from down two points at 60.50 to up 124 points at 61.72 cents.
A soft U.S. dollar index, oversold technical readings, and ongoing questions about a potential shift to soybeans from cotton in the Delta and Southeast contributed to support, analysts said.
Volume rose to an estimated 31,003 lots from 21,142 lots the prior session when spreads accounted for 8,119 lots or 38%. Options volume totaled 3,774 calls and 6,253 puts.
Many dryland cotton producers on the Texas High Plains who had been waiting on a rain and warmer temperatures to begin planting are facing additional delays, but theyΆre not complaining about the moisture.
“ThereΆll be a mad rush to get going when it dries up enough,” commented Ty Stark of Tahoka, who farms in Lynn County, a heavy dryland cotton area. “Very little” cotton has been planted there, he said.
“ItΆs pouring rain right now, and we already were plenty wet,” Stark said, adding that areas in which he farms had received about 3.5 inches. “WeΆd been thinking we might get back into the sandier soils by Wednesday, but now I donΆt know.”
With more rain in prospect, it might keep producers in his area from getting much additional cotton in the ground before the end of next week, he said. Growers still could get the crop planted within a favorable time frame, he added.
Stark recalled planting beyond the insurance deadline (June 10 for Lynn County) up to June 15 last year because of much the same situation, though he said the delayed plantings then were more because of a single flooding rain.
“That mid-June cotton did just as good as the cotton planted around May 20 or whenever,” he said.
Cotton-planting insurance deadlines differ by counties and across the High Plains range generally from May 31 in the north to June 10 in the south. There are later deadlines in some counties east of the Caprock in the Rolling Plains.
Widespread rains have blanketed the bulk of the High Plains cotton area but still have left some southwestern dryland areas without adequate planting moisture.
The High Plains typically gets planting rain coverage through a series of thunderstorms rather than a single rain event. Veteran cotton observers can recall heading into Memorial Day weekend with a planting rain still needed somewhere in the semi-arid region.
Futures open interest declined 1,002 lots Monday to 188,149, with JulyΆs down 937 lots to 99,847 and DecemberΆs up 40 lots to 71,948. Cert stocks grew 601 bales to 81,820. Awaiting review were 5,753 bales at Memphis.
