Continued concerns about China’s economy weighed on the cotton market again this week sending futures prices lower three out of five sessions through Thursday’s action at the Intercontinental Exchange (ICE). The exception was Monday when December cotton managed to settle unchanged.
During Monday’s ICE session, December recovered from modest losses in early activity and was trading on positive ground before sellers returned and moved the contract back to unchanged, settling at 63.00 cents per pound. December traded down to 62.40 cents then moved to the top half of a 113-point range. All other contracts settled with moderate losses to start the week. Crude oil gains seemed to offer some support through midday in New York, according to one analyst.
December cotton spent most of Tuesday’s ICE session trading in negative territory, although it made a few attempts to move higher earlier in the day. In the end, sellers simply outnumbered buyers. December settled 30 points lower at 62.70 after trading in a 98-point range. Most other nearby contracts settled with similar losses.
Wednesday was almost a carbon copy of the previous day as December cotton traded in a 69-point range. Once again, the contract managed to trade higher briefly in early trading but then moved lower and remained there for the rest of the session. December settled at 62.49 cents, down 21 points. The only bright spot was March cotton which settled 13 points higher at 62.26 cents per pound. Wednesday’s action also marked the fifth consecutive session with volume less than 20,000 contracts.
December cotton settled high Thursday for the first time in five sessions and for only the second time in 10 sessions. Unlike the two previous ICE sessions, December actually moved lower in early trading, but buyers returned and sent the contract to a high of 63.04 cents. The contract then traded on positive ground for the remainder of the session and ended 27 points higher at 62.76 cents. Most other futures contracts also posted moderate gains.
In other news, USDA reported net export sales of U.S. upland cotton totaled 66,500 bales in the week ended Aug. 27, up 9 percent from the previous week. Featured buyers were Vietnam, Mexico, South Korea, China, Turkey, and Taiwan. Export shipments for the week totaled 153,100 bales, up 49 percent from the previous week. The primary destinations were Vietnam, Turkey, Mexico, and Indonesia.
Meanwhile, the U.S. cotton crop continues to make progress toward harvest. According to one report, 94 percent of cotton acres were setting bolls, up from 83 percent the previous week but behind the five-year average of 96 percent. The report added that bolls were opening on 22 percent of acres, up from 14 percent the previous week but lagging behind the five-year average of 27 percent.
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