NEW YORK: ICE cotton future rose on Thursday for the first time in three sessions and posted their biggest gains since early July as a pickup in mill demand sparked trade short-covering, dealers said.
The most-active December cotton contract on ICE Futures US rose 1.18 cent, or 1.4 percent, to settle at 84.85 cents a lb.
Limited mill business and trade short-covering in light volume spurred fiber's climb.
Prices extended gains on investor buying as comments from Federal Reserve chairman Ben Bernanke eased worries about how the Fed would unwind its stimulus measures.
"Somebody lifted hedges, and that lifted us up in a flash," said Peter Egli, a British-based medium-sized merchant.
Rain gave way to clear skies in key growing regions of Texas, the top US cotton producing state, and bolstered fiber prices, dealers said. Prices had been under pressure from the wet weather which eased concerns that dry conditions would reduce output from the world's leading cotton exporter.
Trading volumes were light at about 15,000 lots, compared with a 30-day average of 24,000 lots, preliminary Thomson Reuters data showed.
Despite the gains, December cotton closed below its 50- and 100-day moving averages for a sixth straight session.
US weekly government export data showed export sales were up 4 percent from the prior four-week average in the week ending July 11.
The data did not drive gains, as dealers noted the country may not reach a US Department of Agriculture export target of 13.3 million 480-lb bales for the 2012/13 crop year given the current pace of shipments.
Still, merchants remained concerned over tight US supplies at the start of the new crop year that begins on Aug. 1, given expectations of a delayed harvest and the anticipated decline of exchange stocks over the next several months.
Certified stocks fell to about 518,000 bales, according to the most recent ICE data, down from over 620,000 bales at the start of the month.
Comments
Comments are closed.