Cotton futures settled higher four consecutive sessions through Tuesday, Sept. 29, however, gains were modest as the market continued to move in a sideways direction without any significant fundamental news. Some observers noted futures made several attempts to return to the 61.00-cent to 68.00-cent trading range during the period but failed.
December cotton traded higher for most of Monday’s session at the Intercontinental Exchange (ICE) but moved off its highs in the final hour of trading. The contract traded in an 85-point range and settled 11 points higher at 60.75 cents per pound. One analyst said the volume of futures contracts traded was “distressingly small” at 11,698 contracts.
The latest U.S. Crop Progress and Condition report from USDA showed conditions declined slightly with 50 percent of the nation’s crop rated good to excellent compared to 52 percent the previous week. In Texas, 38 percent of the crop was rated good to excellent and 44 percent was rated fair. USDA also noted 69 percent of bolls were open nationwide, up from 57 percent the previous week, and 11 percent of the crop had been harvested. Sixteen percent of the Texas cotton crop had been harvested versus the five-year average of 15 percent.
December cotton settled at 61.00 cents Tuesday, its highest settlement in eight sessions. The contract traded in a range of 60.55 to 61.25 cents per pound. Once again, volume at ICE was small, just shy of 11,000 contracts and the fourth smallest in 2015.
The trading range expanded to 179 points Wednesday as selling pressure increased. December cotton settled 56 points lower at 60.44 cents after trading as low as 59.78 cents, within 8 points of its contract low at 59.70. Volume at ICE more than doubled from Tuesday’s level. During the month of September, December cotton lost 256 points and lost 647 points during the third quarter, according to one analyst.
December opened lower Thursday at ICE and traded in a two-sided fashion before settling 16 points higher at 60.60 cents per pound. Volume was estimated at 20,000 contracts. Other commodities were mixed Thursday.
Net export sales of U.S. upland cotton totaled 117,300 bales in the week ended Sept. 24, according to USDA, up 29 percent from the previous week and 39 percent from the four-week average. Featured buyers were Turkey, Vietnam, Bangladesh, Guatemala, and China. Export shipments during the week totaled 70,500 bales, down 36 percent from the previous week and 39 percent from the four-week average. Mexico, Turkey, South Korea, and Vietnam were the primary destinations.
In the spot cotton market, producers sold 3,255 bales online in the week ended Oct. 1, up from 1,379 bales sold online the previous week. Average prices received this week ranged from 50 to 55 cents per pound.
Cotton market observers were keeping close watch on weather forecasts this week, especially in the Southeast where most of the crop is open and vulnerable. Heavy rainfall totals were reported there this week, and Hurricane Joaquin was threatening to dump more in coastal areas. The rest of the Cotton Belt was enjoying relatively good conditions.
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