Cotton Skids Fom Eight-Day High to Close Lower
December tested its contract low. Export sales report will be for a week during which prices fell to new contract lows. Negotiations on TPP continued in Atlanta.
Cotton futures finished on a moderate loss in benchmark December Wednesday after reversing off a new eight-session high to test the contract low amid month-end and quarter-end positioning.
December settled down 56 points to 60.44 cents, in the lower half of its 179-point range from up 57 points at 61.57 cents to down 122 points at 59.78 cents. The downswing held eight points off the contract low.
December lost 256 points or 4.1% for the month and 747 points or 11% for the quarter. March settled down 40 points to 60.31 cents, holding at the dayΆs low of 59.61 above its contract low of 59.45.
Volume increased to an estimated 23,378 lots from 10,978 lots the previous session when spreads accounted for 2,369 lots or 22%, EFP 154 lots and EFS 43 lots. Options volume totaled 3,003 calls and 1,323 puts.
Traders looked ahead to U.S. export sales and shipments data for the week ended Sept. 24, scheduled for release by USDA at 7:30 a.m. CDT on Thursday. It will be interesting to see whether lower prices resulted in increased business.
Upland sales for shipment this season the prior week were 90,800 running bales, down 6% from the prior week but up 18% from the four-week average. Pima or extra-long staple sales of 9,800 bales hiked the all-cotton total to 100,600 bales.
Prices during the reporting week set several new contract lows in a row and closed as low as 59.97 cents on Sept. 23 in December, its lifetime low finish, before posting a four-day rally amid support attributed partly to scale-down commercial buying.
U.S. exports are projected at 10.2 million statistical bales, down 1.05 million bales from last season and the lowest since 2000-01.
Meanwhile, chief Trans Pacific Partnership negotiators from 12 countries have been meeting in Atlanta in an attempt to narrow remaining differences that have prevented conclusion of the agreement.
Trade ministers, who last met in July, then were to begin two-day meetings Wednesday with a goal of finalizing the agreement.
The National Cotton Council has continued tracking the negotiations in efforts, among other things, to maintain a yarn-forward rule of origin for cotton textile products while seeking opportunities to enhance cotton and textile trade opportunities.
The Obama administration has continued to push for conclusion of the negotiations this year, allowing for an up or down vote in 2016 under the Trade Promotion Authority passed by Congress earlier this year.
Futures open interest expanded 1,219 lots Tuesday to 186,023, with DecemberΆs up 671 lots to 121,918 and MarchΆs up 396 lots to 47,479. Cert stocks declined 798 bales to 45,019 on a newly certified — the first in a long time — of 78 bales and decertification of 876 bales.
