By admin       2018-05-08

July and December hit new contract highs for second straight session. Trend-following funds boosted their net-longs 8,148 lots for the fourth consecutive weekly increase. Cotton futures traded on new contract highs in July and December in brisk early dealings Monday, rising above new highs posted in Friday’s sharp advance. July ticked up 85 points to 87.75 cents, trading within a 103-point range from 86.90 to 87.93 cents on a contract volume of 7,447 lots. December gained 70 points to 81.27 cents, trading within a 112-point range from 80.21 to 81.33 cents on a turnover of 3,695 lots. Maturing May, which goes off the board Tuesday, was asked at 88.15 cents, up 180 points. Ten May delivery notices were issued by Morgan Stanley Co., Inc., bringing the total for the period to 199, and were stopped by Term Commodities. Large outstanding on-call sales and hot, dry weather forecast this week for the Texas High Plains contributed to the rally along with expectations for higher 2017-18 exports and lower ending stocks in Thursday’s supply and demand estimates. Any rainfall from a 20% chance for showers and thunderstorms Tuesday in the Lubbock area is expected to be too light and in too small an area to change overall conditions. The area is experiencing severe to exceptional drought. Meanwhile, trend-following funds boosted their net longs 8,148 lots to 92,264 in ICE cotton futures-options combined during the week ended Tuesday, according to traders-commitments data reported by the Commodity Futures Trading Commission after the close Friday. They bought 8,147 lots, adding 6,853 longs and covering 1,294 shorts to raise their net-longs a fourth consecutive week. Prices for the week ranged from 81.52 to 84.97 cents. Index funds hiked their net-longs 856 lots to 82,812 and non-reportable traders upped theirs 533 lots to 6,773. Commercials sold a net 9,536 lots, adding 11,547 shorts along with 2,011 longs to lift their net-shorts to 181,848 lots. Open interest increased 11,545 lots to 330,682. In ICE cotton futures Friday, July exploded to a new contract high to 87.06 cents — highest since last year’s high at 87.18 on May 15 on the July 2017 contract — and settled up 240 points to 86.90 cents. December also hit a new contract high, vaulting beyond the 80-cent barrier. The inverted July-December straddle traded from 470 to 641 points and widened 142 points to settle at a 633-point July premium on a volume of 5,148 lots. December-March traded from an inverted 46 to 59 points and widened five points to close at a 55-point December premium on 647 lots. Cash online trading rose to 5,609 bales from 4,889 bales on The Seam. Prices averaged 68.60 cents per pound, reflecting in average premiums over loan rates of 21.39 cents. Loan values averaged 47.21 cents. Offerings were 89,470mbales. World values as measured by the Cotlook A Index dropped 25 points to 83.25 cents, narrowing the premium over the prior-day July futures settlement seven points to 8.75 cents. In outside markets, U.S. stock index futures extended Friday’s rally, with Dow Jones Industrial Average futures trading up 82 points and S&P futures up 8.25 points. U.S. dollar index futures resumed its winning ways, trading up 0.240 to 92.650. West Texas Intermediate crude oil traded up 97 cents to $70.62 and Brent crude added 98 cents to $75.85 amid a deepening Venezuela economic crisis and a looming decision on whether the United States will re-impose sanctions on Iran. June gold dropped $1.30 to $1,313.40. July corn was down 0.75%, July soybeans down 0.64% and July Kansas City wheat down 1.62%. Asian stocks closed mixed, down 0.03% in Japan’s Nikkei 225, up 0.23% in Hong Kong’s Hang Seng, down 1.04% in South Korea’s Kospi and up 1.43% in China’s Shanghai Composite. India’s Sensex gained 0.84%. European shares were trading higher, up 0.86% in Britain’s FTSE 100, 0.61% in Germany’s DAX and 0.08% in France’s CAC 40. China’s Zhengzhou cotton futures and prices on the China National Cotton Exchange closed higher. The base price for China’s auctioning of reserve stocks dropped 96 yuan.

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