March Futures Settle Higher Four Consecutive Sessions
Cotton futures at the Intercontinental Exchange (ICE) in New York moved higher in the week ended Nov. 19 with March cotton gaining 96 points. The contract settled moderately higher in four consecutive sessions albeit in a relatively narrow trading range as liquidation of December futures positions continued. Meanwhile, U.S. cotton exports showed an improvement in the latest weekly report.
The week actually began on a weaker note on Friday, Nov. 13, with March cotton, now the most active contract, opening lower at ICE. The contract then moved higher before trading sideways. When sellers returned to the board, March moved to a low of 61.56 cents per pound, its lowest level since Oct. 13, then settled at 61.99 cents, down 17 points. One analyst noted primary factors during the session included options expiration, a stronger dollar, weaker equity markets, and unimpressive U.S. retail sales in October.
The beginning of Monday’s ICE session gave the appearance it would be a repeat of last Friday’s, but buyers returned and moved the March contract to a high of 63.55 cents, its highest since Nov. 3. After a brief spurt of selling pressure, March cotton settled 62 points higher at 62.61 cents. Other than the December ’15 contract, most other contracts settle with similar gains.
Also on Monday, USDA released its weekly Crop Progress report which showed 64 percent of the U.S. crop had been harvested. The Texas harvest was pegged at 56 percent complete, Oklahoma was at 60 percent, and the Kansas harvest was at 51 percent.
March cotton traded on positive ground all of Tuesday’s ICE session, moving as high as 63.37 cents per pound. The contract then settled 6 points higher at 62.67 cents. “Technically, March seems to be turning more positive with consecutive closes above the major moving averages,” one analyst said.
March again settled higher Wednesday after trading in a narrow 46-point range. The contract settled at 62.94 cents, up 27 points. December cotton continued to lose ground ahead of its First Notice Day on Nov. 23.
A weaker dollar and weather concerns seemed to support the cotton market Thursday. March cotton traded between 62.79 and 63.35 cents during the session and settled at 63.12 cents, up 18 points.
A better-than-expected export sales report did not seem to excite the market, according to one market observer. USDA reported export sales of U.S. upland cotton totaled a net 194,400 bales in the week ended Nov. 12 with 16 markets purchasing. The volume was up 52 percent from the previous week and 74 percent from the four-week average. Featured buyers were Turkey, Thailand and Vietnam. Export shipments for the week totaled 53,800 bales, a marketing year low, down 24 percent from the previous week and 41 percent from the four-week average. Primary destinations were Mexico, Indonesia, South Korea, China, and Turkey.
The spot cotton market was much more active in the five trading days ended Nov. 19 as producers sold 63,514 bales online compared to 18,663 bales the previous week. Average prices received this week ranged from 57 to 58 cents per pound.