New York cotton ends mostly up

US cotton futures finished mostly higher on Monday, with May cotton deliveries strong and droughts threatening the December new crop, but July was pressured from export cancellations overhanging the market amid new supply coming from Southern Hemisphere growers.
Deliveries began on May cotton on ICE Futures US, pushing the contracts up 1.41 cents to finish at $1.8822 a lb. Most-active July slipped 1.12 cents to end at $1.6622 per lb., not far from the session low at $1.6522.
--- New-crop cotton menaced by drought
--- May contract cotton deliveries strong
New-crop December cotton was up 1.82 cents to finish at $1.3380 cents per lb., a 1.38 percent increase. "We've got three different markets going. May is rock solid because one stopper apparently has the long side. July has somewhat bearish fundamentals. And, December is acting on its own, because of the severe drought in Texas," said Mike Stevens, independent cotton analyst in Mandeville, Louisiana.
Brokers said, active buyers have been putting their money in new crop December futures instead of old crop July. The July contract was down as demand wanes amid export sales cancellations overhanging the market and movement of huge crops coming available in Australia, Brazil and Argentina.
"That additional supply has weighed on the July contract, which was being held up somewhat by the strength in May cotton," said Stevens. Delivery notices for the May contract were issued late on Thursday, with markets closed Friday for Good Friday and deliveries began on Monday. The contract expires on May 6.
As of today, the world's largest cotton merchant, Allenberg, took all 13 delivery contracts, whose notices were issued late on Thursday, amounting to about 9,500 contracts. "With Allenberg stopping all 13 notices issued, it is apparent that they have virtually all the remaining longs," said Stevens.
Drought in Texas has put the December crop at risk, unless rain comes in the next six weeks. So far, there is none in the forecast, analysts said. Late in the session, the US Department of Agriculture's weekly crop progress report showed cotton plantings rose to 13 percent of cotton acreage as of April 24, up from 9 percent a week earlier, though down from the 15 percent planted in the year ago period.
As of April 21, cotton market open interest fell 8,652 lots to 158,079 lots, ICE Futures US data show. May futures open interest was down sharply at 6,589 lots at the April 21 close. Commodity and financial markets were closed on Friday for the Good Friday holiday.