The streak of nine consecutive losing sessions for cotton at the Intercontinental Exchange (ICE) ended Monday as futures contracts posted modest gains by the close of trading. The market shook off early-session pressure and moved to positive ground with December cotton trading as high as 68.90 cents per pound before pulling back and settling at 68.30 cents, up 18 points and its first higher close since June 27. Traders and analysts attributed the performance to possible weekend business, a stronger macroeconomic environment and the market’s oversold condition.
Tuesday’s ICE session was a two-sided affair as cotton prices traded on either side of unchanged until selling pressure emerged near the close. December cotton settled 55 points lower at 67.75 cents, a new contract low close. All other contracts also posted modest losses on the day. Rain in West Texas, generally good U.S. crop conditions, and advancement of the monsoon in India may have weighed on the market.
The latest U.S. Crop Conditions report showed 53 percent of the U.S. cotton crop was rated good to excellent, down two points from the previous week but right in line with the 20-year average and well above last year’s rating of 42 percent. The Texas crop was rated 39 percent good to excellent, Oklahoma was at 57 percent good to excellent, and Kansas was rated at 57 percent in those categories.
By Wednesday, cotton appeared to be entering the summer doldrums with another two-sided session at ICE. December cotton traded briefly with triple-digit gains early in the session, but late- day selling forced it and forward months back to negative territory. The December contract settled at 67.64 cents, down 11 points, but at least one analyst noted the market seemed to have more balance between buyers and sellers. Traders also seemed to be expecting another solid export sales report.
The report, released early Thursday morning, showed combined net export sales of old- and new- crop U.S. upland cotton totaled 363,700 bales for the week ended July 10. Cotton for delivery in the 2014-15 marketing year totaled 342,800 bales with Turkey, Mexico, Vietnam, and China the top four buyers. Export shipments for the week totaled 81,400 bales, down 40 percent from the previous week and 41 percent from the four-week average. The primary destinations were China, Mexico and Turkey.
The cotton market showed little response to the strong export report from USDA during Thursday’s ICE session as futures traded back and forth in a narrow range and made little headway. December cotton managed to settle one point higher at 67.65 cents per pound after briefly moving above 68 cents.
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