NEW YORK, June 1: NY cotton futures rose to seven-week high on Friday as funds fought to buy on worries that heavy rains this week were not soaking the neediest US cotton growing regions.
Entirely in the the United States you would have to say that it was pretty beneficial for the crop over all but the areas that are the driest didn’t get it, said Alan Feild of STA Trading Services in Memphis. It’s a weather related rally.
Benchmark July cotton rose 1.23 cent to end at 39.47cents a lb, trading 38.70-39.40, its highest since April 11.
New-crop December rose 1.05 cent to end at 43.40 cents, moving from 42.65-43.45 cents. The rest were up 0.90 to 1.10 cent at the close.
Funds reportedly bought 2,500-3,000 contacts on Friday. A trade sale of over 1,000 December puts showed the market is bullish the new crop, dealers said.
Meanwhile, the cotton industry continued to watch with trepidation the crisis between major cotton producers India and Pakistan.
We’re hoping both sides can pull back from the threats they have been making against one another, a cotton Weather Services Corp said Friday.
Both countries produce large amounts and are also vital importers of cotton.
The weekly USDA export sales data showed US net upland cotton sales of 49,600 running bales (500-lb), much lower than trade expectations it would range from 90,000-140,000 bales.
Shipments, which the market is closely watching to see if the US can reach the USDA’s export sales target of 11 million standard 480-lb bales, stood at 174,100 RBs, still below trade belief it would hit 195,000-210,000 bales. I don’t think export sales had any impact on the market today, said Feild.
Eleven million bales in exports would be just below the all-time record of 11.3 million bales sold in 1926.
Floor sources said estimated final volume was a busy 17,170 lots, from the previous count of 7,748 lots.
WHEAT: 3 to 6-3/4 cents per bushel higher, July up 5-1/2 at $2.82 per bushel - Buoyed by strong weekly US export news. USDA’s weekly export sales report showed net export sales of US wheat (old crop and new crop combined) during the week ended May 23 at 450,300 tons, above estimates for 300,000 to 400,000 tons. Technical buying as July broke above resistance at its 50 day moving average of $2.77-1/4 per bushel.—Reuters