The Mar contract gave back 23 points on Fri post the release of relatively soft US export and shipping data, settling at 61.13 – a 132 point weekly setback. The settlement was within the lower one half of the trading range. The May contract lost 31 points settling at 61.60, the net effect leaving the Mar – May spread weakened at (47). Volume quickened for Mar delivery at approximately 27.2K contracts while Mar OI contracted at just below 110K contracts.
For Mon…
It was a miserable week for the longs amid the initiation of scheduled index fund rolling periods and US currency that is again challenging par. The ICE Mar contract gave back 132 points this week, settling at 61.13. The Dec contract gave up 139 points as the promise of increased acreage in 2016 begins to fade.
For next week…
Total net export sales for the week ending Jan 21 were lower vs the previous sales period at nearly 159K running bales while shipments were somewhat higher at nearly 163K running bales. Net sales were above the weekly pace required to meet the USDA’s 10M bale export target while shipments continue to significantly lag the pace requirement. Sales cancelations were lower Vs the previous report at 8K running bales. Total commitments against the 2015/16 marketing year are now nearly 60% of the USDA’s export projection and sales and shipments will need to average approximately 145K and 247K running bales per week, respectively, in order to meet the target.
The latest sales figures are somewhat disappointing, given the price action over the most recent sales period. And, although the shipment pace quickened, it was not enough. Combined with strength in US currency today and index fund rolling, Mar cotton futures could struggle.
The Mar contract nearly erased yesterday’s setback, picking up 50 points ahead of this week’s delayed export report to settle at 61.36. The settlement was within the upper one quarter of the trading range. The May contract gained 46 points settling at 61.91, the net effect leaving the Mar – May spread near unchanged at (55). Volume quickened for Mar delivery at approximately 18.6K contracts while Mar OI expanded at nearly 113K contracts.
For tomorrow…
