Cotton futures settled lower five consecutive sessions before breaking the string on Thursday as global equity markets reacted positively to news that China was taking action to support its stock market. The economic situation in Greece, however, continues to be on some analysts’ minds.
Cotton futures began this week under pressure the entire session Monday at the Intercontinental Exchange (ICE). December cotton settled 44 points lower at 66.95 cents per pound, its lowest close since June 25. The soon-to-expire July contract managed to post a 7 point gain, settling at 66.43 cents, but all other contracts settled with moderate losses. The latest U.S. Crop Progress and Conditions Report, released Monday, also may have added to the market’s weakness.
The U.S. Department of Agriculture reported 57 percent of the nation’s cotton crop was rated good to excellent, up from 56 percent from the previous week. The crop was squaring on 48 percent of acreage and setting bolls on 10 percent, USDA reported. Texas cotton was rated 51 percent good to excellent, and the Oklahoma and Kansas crops were rated 81 percent and 61 percent good to excellent, respectively.
Cotton remained on the defensive during Tuesday’s ICE session, pressured by broad commodity market selling and beneficial rains in West Texas. December cotton continued to retreat from its recent series of settlements in the 67.00-cent range, ending Tuesday’s session at 65.96 cents per pound, down 99 points.
Thunderstorms late Monday and early Tuesday dumped heavy rain across much of West Texas with Lubbock area totals reportedly ranging from 2.00 to 2.50 inches. Other areas reported more than 3.00 inches, and showers returned to the region Thursday and Friday mornings.
December cotton was under pressure the entire ICE session Wednesday in relatively quiet and dull trading as traders seemed unsettled by the economic situations in China and Greece. December, the spot month, settled 66 points lower at 65.30 cents per pound, and most other futures contracts posted similar losses on the day.
Cotton changed course during Thursday’s ICE session, finding support from other commodity markets and news that China will use central bank money to boost the country’s stock market. December cotton settled at 65.86 cents per pound, up 56 points, and other contracts posted similar gains.
News Thursday also included USDA’s latest weekly export sales and shipment report. The department reported net sales of U.S. upland cotton for delivery in the 2014-15 marketing year totaled 30,400 bales, down 62 percent from the previous week and 49 percent from the four-week average. The featured buyers were China, Vietnam, Turkey, and South Korea. Net sales for delivery in the 2015-16 marketing year totaled 64,000 bales, and the featured buyers were Turkey and Mexico. Export shipments that week totaled 211,100 bales, down 8 percent from the previous week and 10 percent from the four-week average. The primary destinations were Vietnam, Turkey, China, Thailand, and Indonesia.
Click here to see more...