NEW YORK: ICE cotton futures fell more than 2% on Monday on expectations that rains in Texas may benefit crops in the top cotton growing region in the United States, with a firmer dollar adding further pressure.
Cotton contracts for May fell 0.72 cent, or 0.8%, to 86.84 cents per lb at 12:26 PM EDT, having fallen as much as 2.3% earlier.
It traded within a range of 85.58 and 87.87 cents a lb.
“About 80% of West Texas got rain and that area has been in drought since July so, it really needed it... and they still need more rain,” said Rogers Varner, president of Varner Brokerage in Cleveland.
A severe winter storm pummeled parts of the US Rockies and western Plains with heavy snow on Sunday, and was responsible for severe thunderstorms in Texas.
“However, the nation’s largest production region is forecast to receive little precipitation over the coming week even as most of the balance of The Belt is expected to see relatively heavy rains,” Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note. Texas Governor Greg Abbott renewed the state’s winter storm disaster declaration. Varner noted that the US dollar, which was up about 0.2% against key rivals, was adding some pressure on cotton prices. A firm dollar makes greenback-denominated cotton costlier for investors holding other currencies.
Total futures market volume fell by 9,697 to 15,045 lots. Data showed total open interest gained 1,213 to 233,296 contracts in the previous session.
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