June 16 2017
DTN Cotton Close: Finishes a Bit Lower After Late Rally
Mills added 2,772 lots to their unpriced position in the new-crop contracts from December through July 2018. Upland cotton under loan declined to 1.186 million RB.
Cotton futures rallied sharply in the late going Friday after falling to new lows for the move, but July and December still finished fractionally lower, with prices across the board down 36 to up 54 points.
July eased three ticks to settle at 71.88 cents, in the upper half of its 164-point range from up 63 points at 72.54 to down 101 points at 70.90 cents on a volume of 18,987 lots. It lost 381 points for the week, its fifth consecutive weekly loss and seventh in the last eight weeks.
December closed down 11 points at 69.36 cents, just above the midpoint of its 137-point range from 69.95 to 68.58 cents on a turnover of 25,007 lots. It shed 331 lots for the week. October closed down 36 points on the day at 70.86 cents, down 347 points for the week.
Volume declined to an estimated 48,195 lots from 61,090 lots the prior session when spreads accounted for 22,523 lots or 37%, block trades 2,548 lots, EFS 100 lots and EFP 38 lots. Options volume dipped to 12,135 lots (4,440 calls and 7,695 puts) from 18,952 lots (6,095 calls and 12,497 puts).
Mills added 2,772 lots to their unpriced on-call position in the new-crop contracts from December through July 2018 last week, according to the latest figures reported by the Commodity Futures Trading Commission after the close Thursday.
This raised their unfixed December-July holdings to 81,351 lots, while producers priced 131 lots to shave theirs to 26,721. The net call difference rose by 2,903 lots to 54,630. That was 32.1% of the rising July-December open interest, compared with 33.8% a week earlier.
A year ago, the unpriced positions in the December 2016 through July 2017 contracts totaled 49,945 lots on the mill side and 1,419 lots on the producer side.
In spot July, with 10 trading sessions left at the time before first notice day, mills had 15,500 lots to be priced and producers had 2,317 lots. Mills priced 9,060 lots and producers priced 557 lots.
This resulted in the July net call difference declining 8,503 lots to 13,183, which was 22.6% of July’s declining open interest, down from 25.9% the week before. The difference a year ago was 10,768 lots, 21.1% of OI.
Meanwhile, repayments on 101,930 running bales of 2016-crop upland loans during the week ended Monday reduced loans outstanding to 1.186 million RB, according to the latest USDA figures.
Upland cotton under loan included 119,904 RB of Form A issued to individual growers and 1.066 million RB of Form G issued to marketing cooperatives or loan servicing agents.
Futures open interest dropped 934 lots to 232,241 lots on Thursday, with July’s down 4,164 lots to 36,682, December’s up 1,628 lots to 158,838 and March’s up 886 lots to 25,473.
Certified stocks grew 3,956 bales to 476,100. There were 5,048 newly certified bales and 1,092 bales decertified. Awaiting review were 5,267 bales, including 176 at Galveston and 5,091 at Memphis.