Cotton futures continue to trade in a relatively tight range at the Intercontinental Exchange (ICE) in New York as cotton news remains light, and crop conditions are mostly good to excellent. Consequently, weather has become a more common topic of discussion among traders and analysts, and demand remains light as the market transitions to the new marketing year.
This week began with December cotton falling below 64.00 cents per pound at ICE. Traders’ attention seemed to be focused on an 8.5 percent decline in China’s stock market Monday. The December cotton contract settled near the bottom of a 95-point range, ending the session at 63.80 cents, down 84 points. It was the lowest settlement since June 19, according to one observer. Good rains across northwestern India also may have weighed on the cotton market.
The U.S. Department of Agriculture released its weekly Crop Progress and Conditions report after the close of trading Monday. It showed 57 percent of the U.S. cotton crop was rated good to excellent. The Texas crop was rated 49 percent good to excellent, Oklahoma’s was rated 75 percent good to excellent, and Kansas cotton was rated 62 percent good to excellent. USDA also noted 44 percent of the U.S. crop was setting bolls in the week ended July 26 compared to 47 percent a year ago.
Cotton prices rebounded Tuesday, enabling December to regain most of the previous session’s loss. A steadier stock market in China may have provided some of the support. December cotton traded as high as 64.98 cents per pound before it stalled and eased lower into the close of trading at ICE. The contract settled at 64.60 cents, up 80 points, and other months also posted moderate gains.
The back and forth action continued Wednesday as cotton futures traded lower for most of the ICE session. December cotton again traded below 64.00 cents, settling at 63.89, down 71 points. Once again, cotton news was limited, and demand remained light at the current price levels.
USDA released its weekly export sales and shipment report Thursday morning which showed net sales of U.S. upland cotton totaled 23,300 bales in the week ended July 23, down 75 percent from the previous week and 63 percent from the four-week average. Vietnam was the featured buyer. Net sales of 69,800 bales for delivery in the 2015-16 marketing year also were reported, primarily for Turkey, Mexico and Taiwan. Export shipments that week totaled 168,500 bales, down 3 percent from the previous week and 10 percent from the four-week average. Vietnam, Turkey and Indonesia were the primary destinations.
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