By admin       2018-10-25

Heavy crop losses in the Southeast from Hurricane Michael and adverse weather for fiber quality preservation in the Texas Plains clashed with weak demand as cotton futures extended gains for the marketing week. Spot December gained 124 points to finish the week ended Thursday at 78.05 cents, around the middle of its 228-point range from 76.88 on Oct. 11 to 79.16 cents on Monday. Its nine-day moving average crossed above the 18-day MA on Wednesday, viewed as a positive signal, and December bounced from a four-day low to end with a slight 13-point gain on the day Thursday. March gained 132 points to finish at 79.49 cents, widening carry from December to 144 points, while December 2019 added 62 points to close at 76.82 cents. Cash online sales climbed to 5,583 bales from 1,751 bales on The Seam. Prices jumped to an average of 74.43 cents per pound from 65.70 cents. Daily averages ranged from 73.80 to 76.80 cents. Loan values averaged 55.28 cents, up from 49.60 cents. Net U.S. all-cotton export sales for this season and next fell to a combined 61,900 running bales during the week ended Oct. 11 from 256,000 RB the week before and 279,500 RB in the corresponding week last year, USDA’s weekly report showed. Upland net sales for shipment in 2018-19 of 32,700 RB, down 67 percent from the prior week and 55 percent from the four-week average, reflected gross sales of 65,700 RB and cancellations of 33,000 RB. Sales went to 14 countries, headed by Pakistan, Vietnam and Mexico. China cancelled 18,500 RB for this season and booked 17,600 RB for next season. Commitments, bolstered by record 2017-18 carryover sales, topped cumulative sales a year ago by 1.295 million RB or 16 percent and were 63 percent of the new export forecast. At the corresponding point last season, commitments were 53 percent of final exports. New-crop sales of 24,200 RB, down from 145,200 RB the previous week, brought 2019-20 commitments to 1.765 million RB, up from forward sales a year ago of 792,000 RB. All-cotton shipments of 141,600 RB, down from 209,400 RB the previous week but up from 91,900 RB during the corresponding week last year, boosted exports for the season to 1.797 million RB. Exports stood 159,000 RB or almost 10 percent over year-ago shipments and were 12 percent of the USDA projection. Shipments need to average approximately 320,500 RB per week to achieve the forecast, while sales averaging roughly 135,200 RB would match the estimate. On the crop scene, trade estimates of cotton crop losses to Michael in the Southeast ranged mostly all the way from 400,000 bales to a million bales and more. Cold, rainy weather on the Texas High Plains added to crop concerns, stirring fears of boll rot and boll lock as worries about crop quality mounted. The U.S. cotton harvest reached 32 percent completed during the week ended last Sunday, up from 25 percent a week earlier, 30 percent last year and the five-year average of 25 percent, USDA’s progress report showed. Boll opening increased seven percentage points on the week to 85 percent, up two points from last year and seven points from the average. Crop conditions on cotton remaining on the stalk fell seven points to 35 percent good to excellent and rose six points to 31 percent poor to very poor, compared with 58 percent and 13 percent, respectively, a year ago. Trader attention focused on Georgia and Alabama, the Southeast’s two largest cotton states, in the aftermath of Michael’s widespread crop losses. Georgia producers spoke of losing a cotton crop of a lifetime. Cotton rated good to excellent in Georgia plunged 43 points to 16 percent and poor to very poor jumped 45 points to 54 percent. Twenty percent had been harvested, up from 14 percent last year but down from the five-year average of 26 percent. In Alabama, where 28 percent had been picked, good-excellent cotton dropped 17 points to 63 percent and poor-very poor increased 10 points to 12 percent. Based on conditions around Oct. 1, cotton in Georgia and Alabama had been expected to produce a combined 4.02 million bales, 21.2 percent of the U.S. upland crop. Harvesting in Texas inched up two points to 30 percent done and boll opening rose nine points to 79 percent, up from the five-year averages of 22 percent and 75 percent, respectively. Good-excellent cotton dipped a point to 27 percent, as did poor-very poor on a drop to 37 percent. Upland classing across the belt increased to 567,811 RB from 269 gins during the week ended Oct. 11. This boosted the season’s total to 1.895 million RB, up from 1.759 million RB a year ago. Tenderable cotton fell to 62.2 percent for the week and 63.7 percent for the season. A year ago, 83.7 percent of the season’s classing met tenderable requirements. Meanwhile, long liquidation selling by funds persisted, according to the Commodity Futures Trading Commission’s latest supplemental traders-commitments report. Trend-following funds sold 2,494 lots in cotton futures-options combined during the week ended Oct. 9, liquidating 2,870 longs and covering 376 shorts to chop their net longs to 33,653 lots. Index funds shaved their net longs 693 lots to 78,163, while non-reportable traders bought 1,570 lots to reverse to net long 1,298 lots from net short 272 lots. Commercials bought 1,618 lots, adding 2,799 longs along with 1,181 shorts to cut their net shorts to 113,112 lots. Open interest rose by 3,730 lots to 351,880. Separately, CFTC on-call data showed mills priced a net total of just 67 lots during the week ended Oct. 12. Their unpriced sales dipped to 136,532 lots, 34.9 percent of the rising cotton futures open interest, down from 36.4 percent. Futures expanded 9,640 lots to 261,333 as prices rose, suggesting fresh speculative buying. Producers added 331 lots, hiking their unpriced position to 45,414 lots.

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