From: agfax.com
By: Duane Howell DTN Cotton Correspondent
December confined to overnight range. Trend-following funds boosted net longs by 15%. Cash online grower sales fell to 272 bales.
Cotton futures ticked on slight losses near the low of a tight session range in quiet early dealings Monday, with December remaining within the overnight trading band.
December hovered off 34 points to 68.73 cents, trading within a 56-point range from 68.63 to 69.19 cents on a contract volume of 2,114 lots. Index fund rolling of longs begins later this week. March traded down 33 points to 69.14 cents on a turnover of 635 lots.
In outside markets, U.S. dollar index futures traded down 0.075 to 98.610, while Dow Jones futures gained 99 points and S&P futures 10.25 points. Crude oil dropped 66 cents to $50.19, Brent crude dipped 21 cents to $51.57 and December gold ticked up $3.30 to $1,271. December corn dropped 0.3%, November soybeans gained 1.2%, December Chicago wheat dipped 0.2% and December Kansas City wheat rose 0.2%.
Earlier, stock markets in Asia were higher, erasing early declines, led by 1.2% gain in the Shanghai Composite Index. Hong Kong’s Hang Seng climbed 1%, Japan’s Nikkei 225 edged up 0.3% and South Korea’s Kospi rose 0.7%. European stocks were higher, up 0.9% in Germany’s DAX and 0.8% in France’s CAC 40. Britain’s FTSE rose 0.2%.
China’s Zhengzhou cotton futures continued a weak trend and prices closed down on the China National Cotton Exchange. India’s MCX cotton futures were weak.
Meanwhile, trend-following funds boosted their net longs by 10,527 lots or 15.1% to 80,177 lots in cotton futures-options combined during the week ended Tuesday, supplemental trader-commitments data reported by the Commodity Futures Trading Commission showed after the close Friday.
Prices gained 401 points for the reporting week, basis December, and lost 193 points the next three days. Index funds reduced their net longs by 2,493 lots to 69,066, while non-reportable traders hiked theirs by 976 lots to 8,558.
Commercials sold a net 9,010 lots to raise their net shorts to 157,800 lots, adding 9,073 shorts along with 63 longs. Open interest expanded 10,387 lots to 347,398.
In futures only, non-commercials increased their net longs by 3.7 percentage points to 30.7% of the open interest. They bought 12,076 lots, adding 8,109 longs and covering 3,967 shorts to raise their net longs to 77,428 lots. Open interest increased 10,197 lots to 252,761.
In futures Friday, December settled lower and lost 150 points for the week, finishing back below its nine-day moving average.
The December-March spread traded from 22 to 42 points carry and widened 12 points to settle at 40 points on a volume of 5,610 lots. March-May traded from 38 to 52 points carry and widened five points to close at 50 points on 1,567 lots.
In cash online trading, grower-to-business sales fell to 272 bales from 700 bales on prices averaging 67.51 cents, up from 67.51 cents, reflecting a drop to 12.70 cents from 14.50 cents in premiums over loan repayment rates. Business-to-business trading was inactive.
World values as measured by the Cotlook A Index fell 125 points to 79.10 cents, widening the premium over the prior-day December futures settlement by five points to 9.30 cents.
