The May contract lost another 103 points to begin the week, settling at 56.50; however, May touched limit down on multiple occasions during the morning session. The settlement was within the upper one half of the trading range. The July contract lost 107 points, settling at 56.26, the net effect leaving the May – July spread strengthened considerably at 24. Volume quickened for May delivery at nearly 37K contracts while May OI contracted at just above 121K contracts.
For tomorrow…
May cotton lost 201 points on the week, settling at 57.53. Dec fared worse, giving up 235 points in settling for the week at 57.33 as the market continues to encourage producers to forsake cotton acreage in 2016.
For this week…
The May contract lost 201 points last week, settling at 57.53. By this morning the May contract had dipped to 57.03, a level to which one must go back to 2009 to match. The July and Dec contracts were also large losers on the week.
For today…
Total net export sales for the week ending Feb 18 were a dismal 121.4K running bales; shipments were discouraging as well at just above 180K running bales. The US is now approximately 73% and 39% committed and shipped, respectively, Vs the USDA’s 9.5M bale export target. Net sales barely met the weekly pace required to meet the USDA’s export target while shipments continue to fall well short of the pace requirement. Sales cancelations were near 5K running bales. Total net sales and shipments will need to average around 108K and 234K running bales per week for the remainder of the current marketing year in order to meet the USDA’s target.
It goes without saying that this data is not supportive; but it remains to be seen how much of today’s poor news is already priced into the market.
