By admin       2018-05-23

Bouts of suspected profit-taking drove prices lower after follow-through buying overnight had lifted July to a new contract high near 90 cents. Rain forecast for the Texas High Plains failed to develop. Chances for rain rated at 30% Tuesday. Cotton futures settled lower Tuesday, with July reversing off a new contract high — its second straight — reached in the overnight session. July finished down 107 points to 87.35 cents, in the lower quarter of its 325-point range from up 146 points at 89.88 cents to down 179 points at 86.63 cents. It had settled higher five sessions in a row and in six of the last seven. December, which had made three contract highs in a row, closed down a modest 32 points to 83.84 cents, just below the midpoint of its 172-point range from 84.75 to 83.03 cents. It posted the session high overnight. Volume slipped to an estimated 43,400 lots from 51,192 lots the previous session when spreads accounted for 15,770 lots or 31%, EFP 372 lots and EFS 11 lots. Options volume increased to 26,900 lots (19,309 calls and 7,591 puts) from 22,312 lots (11,112 calls and 11,200 puts). Bouts of suspected profit-taking drove prices into the red after follow-through buying lifted July to a new contract high just 12 ticks shy of 90 cents, an area of hardened resistance and a target of some traders. Managed-money funds held a net long position of 89,260 lots in cotton futures-options combined as of last Tuesday, down 8,605 lots from a week earlier, according to the latest Commodity Futures Trading Commission’s disaggregated traders-commitments data. They liquidated 6,552 longs and added 2,053 shorts during the reporting week to reduce their net longs after a buildup of five consecutive weeks. Prices ended the reporting week with a loss of 162 points, basis July, and rebounded 279 points the next three sessions as futures-only open interest gained 7,098 lots to 290,042. The OI increase as prices rose suggested fresh fund buying. Index funds, which nudged their net longs up 485 lots to 85,078 lots during the week, will begin scheduled rolling of their net longs from July on May 30, with selling in the spot delivery expected to meet on-call mill fixation buying. The latest CFTC on-call data showed mills came into last week having priced 5,442 July lots to shave their outstanding sales there to 49,643 lots, 36.9% of the declining open interest, against 38.4% a week earlier. First notice day for July deliveries now is 22 trading sessions ahead, on June 25, with July options scheduled to expire on June 15. On the weather front, a 30% chance for scattered showers and thunderstorms is forecast for later Tuesday in the Lubbock area on the Texas High Plains after rainfall predicted for Monday failed to develop. The only significant rain reported for the 24-hour period ended at 8 a.m. CST on Tuesday was 0.38 of an inch at Friona northwest of Lubbock. No severe weather is expected as thunderstorms develop in the western area and drift eastward. Rainfall totals near a quarter inch are expected, favoring the western area. Certified stocks declined 2,461 bales to 77,225 on Monday, according to ICE’s daily report. There were 159 newly certified bales and 2,620 bales decertified. Open interest expanded 4,764 lots to 294,806, with July’s down 894 lots to 128,270 and December’s up 3,929 lots to 126,407

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