Hot, dry weather in Texas and a slight dip in U.S. crop ratings may have been supportive. Plains producer says cotton “doing good” but will need rain soon
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Cotton futures finished modestly ahead Tuesday, with benchmark December edging up to its highest close since July 15.
December settled up 22 points to 67.91 cents, trading within a tight 87-point range from down two points at 67.67 cents to up 85 points at 68.54 cents. It set the trading band for the day by 8 a.m. CDT and finished in the lower third of the range.
Spot October rose 28 points to settle at 68.80 cents and March edged up eight points to close at 68.56 cents.
Volume rose to an estimated 13,900 lots from 10,194 lots the previous session when spreads totaled 1,761 lots or 17%, EFP 81 lots and EFS 49 lots. Options volume totaled 2,498 calls and 2,371 puts.
Hot, dry weather in Texas and a slight decline in U.S. crop conditions for the second week in a row may have been supportive.
Though widespread beneficial rains have fallen this month on the Texas High Plains, parts of the big cotton area havenΆt received much.
LubbockΆs rainfall this month has totaled 2.46 inches, up 1.09 inches from the long-term average but down from 3.21 inches last year. The total for the year is 11.18 inches, compared with the normal of 10.62 inches and 8.3 inches a year ago.
But examples of skimpy amounts at other important cotton sites as recorded by Texas TechΆs West Texas Mesonet have included 0.68 of an inch at OΆDonnell and 0.34 at Tahoka, both in Lynn County; and 0.30 at Seagraves and 0.85 at Seminole, both in Gaines County.
Lamesa, heart of a big dryland cotton producing area in Dawson County, has received 1.24 inches, while Saint Lawrence in Glasscock County to the southeast has recorded only 0.08 inch.
Ty Stark, Lynn County producer, said his cotton still is “doing good” but will need rain soon. It has begun wilting some in the heat of the day, he said, but freshens up overnight.
At the high end of the rainfall amounts in the High Plains cotton area for the month thus far is Ralls, in Crosby County adjoining Lubbock County on the east, with 4.25 inches. In the southern Rolling Plains cotton area, Haskell has received 6.18 inches and Snyder only 0.10 inch.
Futures open interest gained 687 lots Monday to 153,221, with DecemberΆs up 200 lots to 120,336 and MarchΆs up 313 lots to 25,601. Certificated stocks fell 54,768 bales to 236,207.
World values as measured by the Cotlook A Index remained unchanged for the fourth consecutive day Tuesday morning at 83.50 cents. The premium to MondayΆs spot October futures settlement widened 11 points to 14.53 cents.
Forward A Index values for 2014-15 also remained flat at 75.55 cents, leaving the discount to the 2013-14 index at 7.50 cents and widening the premium to MondayΆs December futures close by five points to 7.86 cents.
