U.S. home prices climbed but consumer confidence slipped. Slight chance for rain forecast for mainly eastern Texas High Plains.
Cotton futures settled with a modest gain Tuesday after surging from two down days in a row to score a triple-digit intraday advance.
Benchmark December closed up 43 points to 85.14 cents, in the lower third of its 159-point range from down six ticks at 84.65 to up 153 points at 86.24 cents. March gained 83 points to settle 83.54 cents, around the middle of its 154-point range.
Volume increased to an estimated 13,900 lots from 11,138 lots the previous session when spreads accounted for 2,960 lots or 27% and EFP for 26 lots. Options volume totaled 3,355 calls and 2,960 puts.
The market triggered buy stops on the way up. Analysts knew of no fresh fundamental cotton developments behind the sudden jump, though news that ChinaΆs central bank injected funds into money markets in an effort to ease fears over a credit crunch may have been supportive. Prices remained within a firmly entrenched trading range.
December had closed Monday below 85 cents for the first time since July 18 after it had dipped fractionally below last weekΆs low of 84.60 but then settled slightly above that mark. This could have been viewed as failure to confirm a downside breakout, an analyst said.
In background news, U.S. home prices jumped 12.2% in May from a year ago, the biggest annual gain since March 2006, The Associated Press reported. The increase shows the housing recovery is strengthening.
The Standard & PoorΆs/Case-Shiller 20-city home price index also surged 2.4% in May from April. The month-over-month gain nearly matched the 2.6% increase in April from March — the highest on record.
The housing recovery could be considered good news for economically sensitive cotton demand, an analyst said. Higher home prices are said to help the economy in several ways. They make homeowners feel wealthier, among other things, encouraging consumers to spend more.
But U.S. consumer confidence fell back in July after hitting a five-year-plus high in June, Dow Jones Newswires reported, citing a private sector report.
The Conference Board, an industry group, said its index of consumer confidence fell to 80.3 this month from a revised 82.1 in June, the highest reading since January 2008, originally reported as 81.4. Economists surveyed by Dow Jones had expected the latest index to be little changed at 81.5.
The boardΆs present situation index, a gauge of consumersΆ assessment of current economic conditions, increased to 73.6 in June from a revised 68.7 in June.
On the crop scene, a slight 20% chance for rain was in the forecast for Tuesday in the Lubbock area of the Texas High Plains, mainly in eastern counties, with hail the size of pennies and wind gusts to 50 miles per hour seen as possible. No rain then is foreseen through Monday.
A few sprinkles dotted the region overnight, including 0.33 of an inch recorded by the West Texas Mesonet at OΆDonnell on the High Plains and 0.20-inch near Snyder in the Rolling Plains.
Futures open interest edged up 170 lots Monday to 167,178, with DecemberΆs down 604 lots to 142,689 and MarchΆs up 661 lots to 17,453.
Certificated stocks declined 4,599 bales to 147,858. There were 16 newly certified bales, 4,615 bales decertified and none awaiting review.
World values as measured by the Cotlook A Index fell 50 points Tuesday morning to 92.05 cents. The premium to MondayΆs December futures settlement narrowed nine points to 7.34 cents.
