Cotton Meanders to Slight Closing Losses
Fresh U.S. dollar index weakness and upticks in oil prices appeared to have provided little cotton trading incentive. Annual planting intentions questionnaires distributed by the National Cotton Council.
U.S. cotton futures meandered to slight closing losses in thin volume Tuesday, with many traders apparently already having taken off for the holidays.
Spot March closed down 16 points to 63.16 cents, near the low of its 64-point range from up 38 points at 63.70 cents to down 26 points at 63.06 cents. It had established the dayΆs narrow trading range by around 7:15 a.m. CST and finished a tick below MondayΆs low following that sessionΆs reversal off a seven-day high.
May settled down 17 points to 63.94 cents, while December 2016 also dropped 17 points to close at 64.47 cents. Fresh U.S. dollar index weakness and upticks in West Texas Intermediate crude appeared to have provided little trading incentive for cotton.
The market will trade a shortened session on Thursday, close on Friday for Christmas and have a delayed opening on Monday.
Volume dwindled to an estimated 9,934 lots from 14,109 lots the previous session when spreads accounted for 3,488 lots or 25%, EFP 134 lots and EFS 39 lots. Options volume totaled 1,217 calls and 1,222 puts.
Looking ahead, the National Cotton Council has distributed its 2016 planting intentions survey to producers of upland and extra-long staple cotton across the belt.
The annual survey questionnaires were distributed through a combination of regular mail and email. The survey is a widely respected and quoted barometer of early planting intentions.
Conducted to aid industry planning and policy deliberations, the survey provides the basis for the economic outlook presented to industrywide delegates at the NCCΆs annual meeting.
Survey results will be reported during the joint meeting of program committees on Saturday morning, Feb. 6, in Dallas. To enhance the surveyΆs accuracy, producers have been encouraged to respond by the Jan. 15 deadline.
U.S. all-cotton 2015 plantings of 8.56 million acres, down 22.5% from the previous year, were the smallest since the payment-in-kind program of 1983 when growers seeded 7.926 million acres in the fiber crop.
December 2016 futures currently donΆt offer an incentive to plant much cotton, analysts have pointed out. However, some also have observed that 2016 prices for corn, soybeans and sorghum arenΆt as competitive for cotton ground.
Futures open interest fell 1,374 lots Monday to 185,198, with MarchΆs down 1,861 lots to 128,422 and MayΆs down 159 lots to 30,069. Cert stocks declined 515 bales to 64,723.
