Cotton futures tumbled to steep closing losses Monday, giving back a large chunk of last weekΆs strong advance.
Benchmark December closed down 216 points to 65.84 cents, near the low of its 217-point range from down 12 points at 67.88 to down 229 points at 65.71 cents. March lost 166 points to settle at 65.77 cents.
December touched the session high just after opening lower overnight following a negative performance on Friday when it reversed off a new high for the move to finish with a slight loss, its inversion to March narrowed and the nine-day moving average crossed below the 18-day MA.
Selling also may have been encouraged by an inability to hold above resistance late last week in the area of the 38.2% retracement (68.09) of the move from the June 23 high to the Aug. 1 contract low.
Some brief details reported by Cotlook of ChinaΆs new target price program for producers in the main cotton-producing Xinjiang region also were thought to have weighed on market sentiment.
Volume rose to an estimated 26,100 lots from 24,101 lots the previous session when spreads accounted for 8,060 lots or 33% and EFP 220 lots. Options volume totaled 2,367 calls and 3,949 puts.
On the crop scene, harvesting was virtually completed in the Rio Grande Valley last week and modules accumulated on gin yards, according to a review by the cotton division of USDAΆs Agricultural Marketing Service.
Ginning expanded in central Texas and daily receipts increased at the Corpus Christi classing facility. Defoliation was around 60% completed and about 10% of the fields harvested in Ellis and surrounding counties. Yields of two bales an acre were reported in some dryland fields.
Classing rose to 151,155 bales at Corpus during the week ended Thursday from 123,717 bales the previous week. This brought the seasonΆs total to 556,025 bales, up from 202,698 bales classed a year ago.
Cotton tenderable on futures contracts slipped to 77.2% from 79% the week before and totaled 78.2% for the season. A year ago, 46.7% met tenderable requirements.
Overcast conditions prevailed through much of the period in the Southeast. Precipitation totals measured from trace amounts to 2 inches in portions of Alabama, the Florida Panhandle and South Georgia. Heavier downpours of up to 10 inches fell in the Carolinas and Virginia.
The rainfall provided little benefit to early-planted dryland fields with open bolls and interrupted some limited defoliant applications. Boll rot and hard-locked bolls were reported in irrigated acreage in Georgia owing to cloudy, wet conditions. Hot, dry weather was needed. Crop optimism was reported in Virginia.
Thunderstorms dumped more than 9 inches of rain in some areas of the North Delta. Some defoliation was reported in southern Arkansas but most producers delayed applications based on forecasts of heavy rainfall. Defoliation was expected to expand this week. In the South Delta, defoliation expanded in Louisiana and was underway in Mississippi.
Remnants of Hurricane Norbert combined with monsoonal humidity produced record amounts of rain in Arizona. A record 3.25 inches fell at Phoenix on Sept. 8. The average September rainfall is around one-half an inch in that area. An additional inch to 1.5 inches fell the next day. Standing water was reported in some cotton fields around Buckeye.
Amounts from scattered showers varied from a tenth to a quarter of an inch in the San Joaquin Valley. Most producers were preparing fields for defoliation and a few fields were defoliated in the southern valley.
Futures open interest expanded 1,301 lots Friday to 185,517, with DecemberΆs up 154 lots to 112,254 and MarchΆs up 916 lots to 56,345. Cert stocks declined 2,387 bales to 50,669.
World prices as measured by the Cotlook A Index gained 30 points Monday morning to 76.15 cents, widening the premium to FridayΆs December futures settlement by 39 points to 8.15 cents.
