By Duane Howell DTN Cotton Correspondent
December 14, 2017
March got within a tick of its contract high and May and July hit new contract peaks. U.S. export commitments stand at 73% of USDA’s 2017-18 projection. Cotton Council pleased with U.S. team’s WTO efforts. Cotton futures jumped to triple-digit gains in 2017-18 marketing year contracts for a second session Thursday, bolstered partly by U.S. weekly export sales coming in above expectations.
March closed up 120 points at 75.33 cents, near the high of its 166-point range from down 23 points at 73.90 to up 143 points at 75.56 cents. It got within a tick of its contract high of 75.57 cents set on March 20. May and July hit new contract highs.
May finished up 108 points at 75.63 cents, trading within a 164-point range from 74.20 to 75.84 cents. July settled up 110 points at 75.97 cents, trading from 74.49 to 76.10. The other contracts gained 14 to 41 points, with December 2018 up 17 points to 72.47 cents.
Volume rose to an estimated 34,046 lots from 27,764 lots the prior session when spreads accounted for 10,734 lots or 39%, EFS 88 lots and EFP 48 lots. Options volume quickened to 17,573 lots (10,154 calls and 7,419 puts) from 4,589 lots (2,281 calls and 2,308 puts).
Net all-cotton export sales for shipment this season of 269,800 running bales during the week ended last Thursday, up from a net 173,600 RB the week before, boosted 2017-18 commitments to 10.537 million RB. Commitments were up 2.557 million RB or 32% from a year ago and were 73% of the new USDA export estimate. A year ago, commitments stood at 55% of final exports.
All-cotton shipments of 180,300 RB, down from the prior week’s marketing year high of 270,300 RB, brought the total for the season to 2.731 million RB, widening the lag behind year-ago exports to 499,700 RB or to 16%.
Shipments amounted to 19% of USDA’s December forecast, compared with 22% of final 2016-17 exports at the corresponding point last season. To achieve the USDA estimate, shipments need to average roughly 353,300 RB a week, while weekly sales averaging approximately 115,700 RB would match the export projection.
Net sales for shipment next season of 36,000 RB, down from the prior week’s 66,100 RB, raised 2018-19 commitments to 1.115 million RB, up from forward bookings a year ago of 560,700 RB. Elsewhere on the trade front, the National Cotton Council thanked U.S. Trade Representative Robert Lighthizer and the U.S. negotiating team for their efforts at a World Trade Organization summit this week in Buenos Aires, Argentina.
NCC Chairman Ronnie Lee, a Georgia producer, said in a statement the council appreciated the USTR and USDA team insisting that the WTO “remain focused on the long-term goal of a balanced outcome that will expand trade.”
This was especially important for cotton, he said, adding that “some WTO members continue to call for concessions above and beyond the reforms we already have made without anything in return.”
Through semi-annual dedicated discussions established by the WTO in December 2013, Lee said, cotton is the only agricultural commodity with an explicit mechanism that allows for the evaluation of domestic support, export subsidies and market access.
Lighthizer was reported to have criticized the WTO for losing its focus on trade negotiations and becoming a “litigation-centered” organization that has failed to pay sufficient attention to enforcing existing rules.
Futures open interest expanded 3,079 lots to 257,139 on Wednesday, with March’s up 990 lots to 169,085 and March’s up 1,255 lots to 47,361. Certified stocks remained at 47,628 bales.