Cotton futures snapped a four-day rally to settle slightly lower on Tuesday, after marking an over-three week high earlier in the day, weighed down by a steady dollar amid indications of good harvest weather in the cotton belt areas of India and Texas. The first month December cotton contract on ICE Futures touched a session high of 71.70 cents per lb on Tuesday, a peak since September 23. The dollar index, which tracks the greenback against a basket of six major currencies, was nearly flat at 97.885.
The greenback had rallied around 3 percent since the end of September, mirroring a climb in benchmark US Treasury yields to a four-month high above 1.8 percent on expectations that the Fed would raise rates by December. "You can chalk up a lot of today's movement to the (US) dollar," said Gabriel Crivorot, an analyst at Societe Generale in New York. The December cotton contract on ICE Futures US settled down 0.04 cent, or 0.06 percent, at 71.15 cents per lb. It traded within a range of 70.67 and 71.7 cents a lb, the highest since September 23.
The dollar index was nearly flat at 97.885. The US Department of Agriculture's weekly crop progress report released on Monday after market close showed that 47 percent of cotton crops in the United States were in good-to-excellent condition, down marginally from 48 percent a week ago.
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