ICE cotton futures fell on Tuesday to a near two-week low on favourable weather conditions for planting of the natural fibre crop and increasing expectations of more export cancellations. Favourable weather in top growing regions in the United States and export cancellations from India and China have been putting pressure on prices since last week.
"It is just a continued technical weakness in the market ... We can expect more cancellations from the big spike in price," said Ron Lee, general manager at McCleskey Cotton in Bronwood, Georgia. "The December (crop) doesn't have much going for it at the moment and seems to be off to a fine start. The crop certainly has a long way to go, but all in all is off to a promising start."
The December cotton contract on ICE futures US settled down 0.64 cent, or 0.88 percent, at 72.37 cents per lb, after touching a session low of 72.22 cents a lb, the lowest since May 11. Meanwhile, the July cotton contract settled down 1.5 percent at 77.22 cents per lb.
The July contract on Tuesday edged below the 100-day moving average, a key support level and analysts expect many speculators to roll over their contracts from July to December. Speculators raised their net long position in cotton in the week to May 16 by 9,464 contracts, to 105,674, US Commodity Futures Trading Commission data showed on Friday. The dollar index was up 0.42 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.55 percent. Certificated cotton stocks deliverable as of 22MAY17 totalled 409,046 480-lb bales, up from 405,991 in the previous session.
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