December cotton futures settled lower four consecutive sessions this week at the Intercontinental Exchange (ICE), losing a combined 195 points. Most notable was the contract’s move below the recent support level of 63.00 cents at the close of trading Thursday.
Selling pressure Monday kept December cotton in the bottom half of a 74-point range during the session, trading as low as 63.37 cents per pound before changing direction and settling at 64.00 cents, down 21 points. Beneficial weekend rains in West Texas were noted by several market observers. Other commodities traded mixed Monday.
USDA’s Crop Progress and Condition report for the week ended Aug. 2 showed little change from the previous week as 57 percent of the U.S. crop was rated good to excellent. In Texas, 49 percent of the cotton crop was rated good to excellent, 74 percent of Oklahoma’s crop was rated in the top two categories, and Kansas cotton was rated 63 percent good to excellent.
December cotton futures traded up to 64.25 cents early in Tuesday’s session as buying emerged, but selling pressure returned and sent the contract to a low of 63.37 cents per pound. At the close of trading, December settled at 63.64 cents, down 36 points. All other contracts posted similar losses. One positive bit of news mentioned by one market analyst Tuesday was a 3.7 percent bounce in China’s stock market.
A lack of any fresh fundamental news Wednesday kept the cotton market in its recent trading range. As it did Tuesday, December cotton started the session higher, even trading up to 63.95 cents per pound, but selling pressure surfaced. The contract managed to trade around unchanged during the afternoon before moving lower in the final hour of trading. December settled at 63.52 cents, down 12 points. Cleared volume at ICE was reported to be just over 14,000 contracts.
USDA released its weekly export sales and shipment report Thursday morning which showed a net reduction in sales of 14,200 bales for the week ended July 30. Shipments totaled 186,600 bales for the week, up 11 percent from the previous week and 8 percent from the four-week average. The primary destinations were Vietnam, Turkey, South Korea, Mexico, and China.
The department’s export summary for the 2014-15 marketing year through July 30 showed cumulative sales of almost 11.9 million bales for both U.S. upland and pima cotton versus the most recent estimate of 11.0 million. Export shipments to-date totaled just over 11.3 million bales.
Thursday easily was the worst day for the cotton market as December cotton opened lower and fell to 62.10 cents during the session, its lowest trading level since mid-March. The contract held near the bottom of a 134-point range ahead of the settlement and finished the session at 62.26 cents per pound, down 126 points. Volume at ICE was estimated at 39,900 contracts.
Click here to see more...