Commodity fund, liquidation drive cotton futures lower

Commodity fund and local liquidation drove cotton futures on the New York Board of Trade lower last week. The board opened higher on good export sales news but soon lost its upward momentum.
In its weekly export sales report, USDA showed net export sales of 260,300 bales in the week ending Oct. 27 were more than twice the previous week’s sales and 56 percent more than the four-week average. Featured buyers included China, Mexico, Turkey and Ireland.

Export shipments of 141,900 bales were 32 percent more than the previous week’s figure and 4 percent more than the four-week average. Primary destinations were China, Mexico, Turkey and South Korea.
Although sales were higher than expected, sources said, exports still were in need of improvement.
“Shipments were better than last week but still need to im-prove,” one trader said, “and we fully expect that they will.” On a less optimistic note, an analyst said, “Shipments are not much better and continue to concern me.”
He continued, “The market is quickly approaching the 25 percent mark of the season, the 13th week as of last Thursday, with only three-quarters of the season left to meet USDA’s export estimate of 16.0 million bales.”
Meanwhile, sales continued to be healthy in the spot cotton market. Online trading by producers in Texas, Oklahoma and Kansas in the week ended Nov. 3 totaled 12,087 bales compared to the previous week when 4,356 bales were traded.
Average prices received by producers in the most recent week ranged from 47.14 to 53.74 cents per pound compared to 48.81 to 53.02 cents per pound the previous week.
Open skies ruled across most of the Cotton Belt last week allowing outside activities to progress with little interruption. Harvesting is gaining momentum in the Southeast and the Far West with pickers running after dark. Growers are taking advantage of favorable conditions in West Texas, rushing to get the crop off the stalk before any adverse weather begins.
The hauling of modules from fields to gins continues at a steady pace, and backlogs of seed cotton supplies are building. Gins are operating at full capacity, and many expect to work well into January.
Picking is winding down in Central Texas, and if good weather holds, fieldwork likely will be completed by the end of the month.
In the Memphis Territory, final harvesting activities are drawing to a close, and farmers are making great strides in getting fields prepared for winter. Although a few small gins have finished the season, many large gins likely will continue for several weeks.
In other news, continuing negotiations between U.S. and Chinese textile trade representatives ended without a comprehensive agreement, however, a short-term deal was signed regarding imports of Chinese socks.
“Our discussions this week have yielded substantial pro-gress on a large number of issues. We look forward to meeting again soon,” said a U.S. trade representative.
Source: Sweetwater Reporter

Comments are closed.