DTN Closing Cotton 05/21 15:05
Cotton Surges to New Contract Highs
Cotton expected to benefit from easing of U.S.-China trade tensions. Heat
stress reported in some South Texas cotton. Up to 5 inches of rain reported in
the Texas Rolling Plains. Planting advanced rapidly in the Southeast and made
excellent progress in the Delta. Pima cotton made normal progress in the Far
By Duane Howell
DTN Cotton Correspondent
Cotton futures surged to new contract highs by early Monday morning and
finished near the day's top prices, led by spot July as news of China's pledge
to import more American goods appeared to have triggered short covering and
fresh fund buying.
July gained 187 points to settle at 88.42 cents, trading within a 163-point
range from up 55 points at 87.10 cents to a new contract high at 88.73 cents.
December advanced 173 points to settle at 84.16 cents, trading within a
219-point range from the opening low overnight at 82.70 cents to 84.89 cents,
its third new contract high in a row.
Cotton would be one of the commodities expected to benefit from the easing
of U.S.-China trade tensions. Bad weather has damaged cotton in China's major
Xinjiang producing region and there have been significant reductions in China's
reserve stocks in recent years. China is the second largest export buyer of
U.S. cotton behind Vietnam this season and also was the second largest
destination the prior year.
Volume rose to an estimated 51,200 lots from 43,716 lots the previous
session when spreads accounted for 16,081 lots or 37% and EFS 1,054 lots.
Options volume dipped to 22,312 lots (11,112 calls and 11,200 puts) from 28,325
lots (17,365 calls and 10,960 puts).
On the crop scene, some cotton exhibited heat stress in South Texas during
the week ended Thursday, a weekly review by USDA's Agricultural Service
reported Friday. Stands were irrigated.
Drought had impacted dryland cotton in Willacy County, leaving some fields
fallow and others failing to establish stands, according to the Texas A&M
Extension Pest Cast. Integrated Pest Management specialists helped producers
manage fleahopper, aphid, red spider mite, white fly and thrips populations in
the Coastal Bend, Upper Coast and Rio Grande Valley. They monitored for
bollworms and Bt resistance in parts of Texas.
Fields were soggy in the Blackland Prairies and delayed replanting. Some
areas had received 6 inches of rainfall. Stands had emerged and needed dry,
sunny conditions to advance. Planting neared completion.
Scattered thunderstorms brought rain, hail and gusty winds to cotton areas
of the West Texas Plains. Estelline in Hall County in the northern Rolling
Plains northeast of Lubbock and some other areas got a total of up to 5 inches
of rain and severe hail. Planting expanded as conditions allowed. Fields were
irrigated and some cotton had emerged. Dry, windy conditions prevailed much of
Planting advanced rapidly in the Southeast under mostly sunny skies early in
the period. Producers welcomed widespread showers later in the week in the
Lower Southeast where 0.50-inch to an inch fell in localized areas throughout
Alabama, the Florida Panhandle and Central Georgia. Heavier accumulations of up
to 2 inches fell along the Atlantic coastal areas of Georgia.
Producers in Alabama had begun irrigating emerging cotton in areas that had
missed the rainfall. In Georgia, the beneficial moisture will allow dryland
farmers to resume planting where soils had become hard and dry. Some fields
will have to be replanted where moisture arrived too late and also in some
earlier-planted fields where cool soils hindered good plant populations at
Hot, dry conditions early in the period slowed planting in some areas of the
Carolinas where soil moisture deteriorated and producers waited for rainfall.
Reports indicated irrigation was used every day where available. Later in the
week, showers brought a quarter to half an inch of welcome moisture to some
areas of the Carolinas and Virginia and wet weather in the near-term forecast
was expected to idle planters.
Producers made excellent planting progress in the Delta. A late-week storm
front brought up to an inch of rain generally and idled outdoor activities
until fields firmed enough to support equipment.
The Pima crop advanced normally in the Far West, with little to no insect
pressure reported. Planting was completed. Sources in El Paso said there was a
slight increase in Pima acreage as more irrigation water became available and
was released to growers.
Certified stocks increased 296 bales to 79,686 on Friday, according to the
daily ICE report. Open interest rose by 2,728 lots to 290,042, with July's down
977 lots to 129,164 and December's up 1,717 lots to 122,476
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