NEW YORK: ICE cotton futures fell on Wednesday to the lowest in more than a month on a stronger dollar and expectations that rainfall in Texas would be beneficial for the natural fibre crop.
Cotton contracts for May fell 1.16 cent, or 1.4%, to 82.37 cents per lb at 12:42 p.m. EDT (1642 GMT).
The contract fell to 81.91 cents earlier, its lowest since Feb. 4.
“West Texas is still in drought but in the last week or so there has been some rains, some snow and it’s (also) snowing and raining right now in north Texas so, that is somewhat beneficial (to the crop),” said Rogers Varner, president of Varner Brokerage in Cleveland.
The US dollar rose to a four-month high against key rivals, making cotton costlier for other currency holding investors.
“Demand has been very good. We might see some deterioration in tomorrow’s report, but it has been very steady and good,” Varner said. Market participants are currently awaiting the US Department of Agriculture’s weekly export sales report, due on Thursday.
“Internationally, there are rumours that textile orders from the EU (European Union) are being either postponed or cancelled as another economic shutdown looms,” Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
Though German Chancellor Angela Merkel ditched a plan for an extended Easter holiday to try to break a third COVID-19 wave, France may widen its restrictions to three other regions and Belgium imposes new lockdown measures.
Total futures market volume rose by 1,385 to 20,146 lots. Data showed total open interest gained 326 to 229,612 contracts in the previous session.
Certificated cotton stocks deliverable as of March 23 totalled 95,802 480-lb bales, down from 99,239 in the previous session.
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