NEW YORK: ICE cotton futures rose from a more than one-week low on Monday as investors anticipated a further deterioration in crop quality in a weekly US government report as uncertainty lingered around US-China relations.
Cotton contracts for December rose 0.49 cent, or 0.8%, at 62.85 cents per lb at 1:40 p.m. EDT (1740 GMT).
Earlier in the session prices touched their lowest since July 31, having posted their biggest one-day loss in more than 4 months in the last session at 3.8%.
"This week cotton might see some strength as investors are expecting the crop condition report to reflect the negative effects of the weather on the crop," said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
The United States Department of Agriculture will release its weekly crop progress report later in the day.
"Along with that the market is also anticipating a strong shipment to China in the weekly export sales report, similar to the last," Brown said. He added, however, that it is still uncertain whether the review of the US-China phase 1 deal this week will go in favour or fall apart.
The United States and China are to review their Phase 1 trade deal in an Aug. 15 meeting. The United States is the biggest exporter of cotton, while China its largest consumer.
Tensions between the world's two largest economies escalated after Beijing on Monday imposed sanctions on Republican US lawmakers in response to Washington's imposition of sanctions on Hong Kong and Chinese officials.
The impact of the prolonged US-China dispute, along with the global virus pandemic, have contributed to a fall of 10% in natural fibre prices so far this year.
Total futures market volume fell by 22,254 to 16,226 lots. Data showed total open interest fell 1,982 to 192,208 contracts in the previous session.-Reuters
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