June 15 2017
DTN Cotton Close: Falls to 6 Month Low
U.S. all-cotton export commitments reached 103% of USDA’s 2016-17 projection and 27% of the forecast for 2017-18. A sizable acreage of dry-planted cotton still hasn’t emerged on the Texas High Plains.
Cotton futures tumbled to steep losses across the board on heavy volume Thursday, extending a losing streak to five sessions in a row.
July lost 159 points to settle at 71.91 cents, its lowest finish since Dec. 30 and in the lower third of its 223-point range from unchanged on the opening overnight at 73.50 cents down to 71.27 cents. Its volume rose to 21,242 lots. July options expire Friday.
December shed 148 points to close at 69.47 cents, in the lower quarter of its 191-point range from 70.94 to 69.03 cents on a volume of 35,198 lots. That was its lowest finish since Dec. 28. October fell 170 points to finish at 71.22 cents. The other contracts closed down 119 to 158 points.
Disappointing U.S. weekly export sales, with old-crop upland sales (69,400 RB) slowing to the second lowest of the marketing year, helped to keep the market in a steep downtrend.
Volume increased to an estimated 61,090 lots from 40,837 lots the prior session when spreads accounted for 22,185 lots or 54%, EFS 579 lots and EFS 537 lots. Options volume rose to 18,592 lots (6,095 calls and 12,497 puts) from 13,168 lots (5,205 calls and 7,963 puts).
Net U.S. all-cotton export sales for shipment this season came in below expectations at 72,700 running bales during the week ended June 1, down from 92,100 RB the previous week, as 2016-17 commitments reached 14.553 million RB.
Commitments — outstanding sales of 2.181 million RB plus shipments — maintained a lead of 5.594 million RB or about 63% over cumulative sales a year ago. The USDA forecast is for exports to reach the second largest on record, up 58% from last season.
This season’s commitments stand at 103% of the export projection, compared with 101% of final shipments at the corresponding point last season. Some of the 2016-17 commitments will be used to help meet domestic mill and export needs through about the first three months of the 2017-18 marketing year ahead of volume movement of the new crop.
All-cotton shipments of 245,800 RB, down from 324,400 RB the prior week, brought the total for the season to 12.372 million RB, up 5.05 million RB or 69% from year-ago exports. Shipments were 86% of the USDA estimate, compared with 83% of final 2015-16 shipments a year ago.
Sales for shipment next season edged up to 197,600 RB from 191,400 the week before and boosted 2017-18 commitments to 3.472 million RB, up from forward bookings a year ago of 1.616 million RB.
Export commitments for the 2017-18 marketing year beginning Aug. 1 totaled 27% of USDA’s June forecast. A year ago, forward sales were 11% of the current 2016-17 USDA estimate.
Meanwhile, a sizable acreage of dryland cotton dry-planted to meet deadlines for full insurance coverage still hasn’t emerged on the Texas High Plains, and many stands that have been achieved are struggling under hot temperatures and drying winds.
Temperatures are forecast to soar to 105 degrees at Lubbock on Friday and a scorching 107 degrees on Saturday. The thermometer has hit 100 to 101 degrees every day this week was expected to get there again Thursday.
The large bulk of the region is expected to remain dry through at least the middle of next week. Forecasters say a few thunderstorms could develop Thursday afternoon and evening, mainly in the Rolling Plains.
Rainfall has totaled only 0.35 of an inch this month at Lubbock, 1.19 inches below normal, and precipitation since Jan. 1 at 5.84 inches is 1.91 inches below the long-term average.
Futures open interest declined 1,367 lots Wednesday to 233,176, with July’s down 4,557 lots to 40,846, December’s up 1,300 lots to 157,210 and March’s up 1,498 lots to 24,210.
Certified stocks grew 4,133 bales to 472,144. There were 5,064 bales awaiting review, including 1,232 at Galveston and 3,832 at Memphis.