ICE cotton under pressure
Nearby months were trending between 32 and 67 points lower by midday. A mixed tone was apparent Tuesday morning as traders await USDA’s June supply and demand report, which is due out today at noon, EST. July ’19 cotton found light strength early in the session, moving to modest gains and reaching an intraday high of 66.36 cents/lb (+37). The spot month was mostly higher during early trading, with the exception of dropping just below unchanged on a few occasions. Just before 1200 GMT, selling picked up and July ’19 cotton fell lower. By 1337 GMT, the nearby month was trading near the bottom of an 86-point range and down 47 points.
December ’19 cotton was also under pressure by midday, opening and trading higher over most of the morning until sellers dropped the new crop contract to negative ground around 1200 GMT. By 1337 GMT, December ’19 cotton had moved off its low, but was still trading in the bottom half of a 113-pooint range and down 67 points.
Cotton futures on China’s Zhengzhou Commodity Exchange settled higher overnight. By midday, the US dollar was trading lower, as well as corn, soybeans and wheat.
Today is the third out of five days for the largest long-only spec fund to roll positions from July to December. December ’19 cotton will soon take over as lead month, as volume in the new crop contract has steadily increased.
Total open interest decreased by 3,469 contracts to 206,687. July ’19 interest decreased by 8,314 contracts to 65,804 while December ’19 interest increased by 4,267 contracts to 108,043.
Certificated stocks were reported at 86,065 bales, which included new certs for 162 bales. There were 1,463 bales awaiting review and 15,377 bales reported in both cert stocks and CCC loan as of June 10.
Volume was estimated at 12,100 and nearby months were trading as follows by 1337 GMT:
- ICE No 2 cotton settles on negative ground
- Heavy rains falling in northern parts of South Texas; dry elsewhere in US cotton belt
- ICE cotton lower
- ICE No. 2 cotton settles on steep losses
- Excessively hot, dry weather continues across Memphis Territory
- ICE cotton moderately lower