NEW YORK: ICE cotton futures slipped on Wednesday, as a firmer dollar and profit-taking precipitated a pullback from a more than two-year peak that was scaled on a bullish supply-demand outlook.
The cotton contract for March fell 0.74 cent, or 0.9%, to 80.96 cents per lb by 12:58 p.m. EST (1758 GMT), having touched its highest since Sept. 2018 at 82.08 cents earlier in the session.
“The dollar is performing better,” weighing on the market, said Bailey Thomen, cotton risk management associate with StoneX Group.
Some investors could also be booking profits following the sharp rally post the WASDE report, Thomen added, referring to the US Department of Agriculture’s World Agriculture Supply and Demand Estimates.
The US dollar rose 0.4% against key rivals, making greenback-denominated cotton more costly for investors holding other currencies.
Cotton prices rose more than 1.5% on Tuesday after the WASDE report showed lower US production and ending stocks estimates for the 2020/21 crop year.
Market participants are now waiting for the weekly export sales report from the USDA due on Thursday.
Last week, the USDA’s weekly export sales report showed net sales of 153,100 running bales (RB) for 2020/2021 were down 47% from the previous week.
Total futures market volume fell by 20,708 to 23,874 lots.
Certificated cotton stocks deliverable as of Jan. 12 totaled 68,681 480-lb bales, unchanged from 68,681 in the previous session.—Reuters
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