By The cotton market began the trading week on Jan. 17 right where it left off the previous day, with cotton futures continuing to climb at the Intercontinental Exchange (ICE). Cotton contracts spent most of the active trading hours on positive ground, moving as high as 87.14 cents, a level not seen since early October of last year. Eventually, the cotton contract settled near the top of the 125 point range at 86.80 cents ahead of the three-day weekend.
After Monday's market holiday and China's announcement to end its stockpiling program, futures continued to surge upward Tuesday. The spot month advanced to its highest level in five months. After posting more than a 150 point gain the March contract settled up 133 points at 88.13 cents per pound. The December contract continued to test ground just below the 80 cent level and closed at 79.92 cents. Certificated stocks increased to 52,718 bales following 2,378 new certs and 639 decerted bales reported on Jan. 17.
The markets six-day winning streak came to an end Wednesday. March cotton traded on positive ground briefly, and managed to reach just above the 88 cent level before it began to retreat. The lead month slid below the previous day's gains and hit a low of 86.64 cents before moving back to the upper half of a 174 point trading range, closing at 87.84 cents. The downward trend continued into Thursday where futures lost further ground. The March contract was held to the bottom half of its 120 point range, and after some failed attempts to rally the spot month eventually landed at 87.33 cents per pound.
Due to Monday's holiday the USDA export report was released Friday. Net upland sales of U.S. cotton totaled 496,500 for the week ended Jan. 16, up significantly from the previous week and well as the four-week average. The featured buyers were China, Vietnam and Indonesia. Export shipments that week totaled 235,800 bales, up 9 percent from the previous week and 29 percent from the four-week average. The primary destinations were Turkey, China, and South Korea. Activity on the spot market slowed with 53,312 bales sold through Jan. 23, compared to the 120,701 bales sold the previous week. Average prices received by producers ranged from 77 to 79 cents per pound this week compared to 75 to 78 cents the previous week.
In other news, freezing temperatures gripped most of the United States throughout the week. Temperatures were near or below freezing in the Delta growing region Thursday. Cold and dry weather moved into West Texas but warmer weather was expected by the weekend. Severe to extreme drought continued to plague California where above normal temperatures and below average precipitation is expected to continue through the end of the month.
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