NEW YORK: ICE cotton futures rose more than 1% on Thursday, helped by a retreat in the dollar and healthy US exports overall.
Cotton contracts for March rose 1.55 cents, or 1.5%, at 107.34 cents per lb by 11:31 a.m. ET (1631 GMT). Prices traded between 105.88 cents and 107.72 cents a lb.
“The best thing happening for cotton right now is the dollar edging down,” said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
“Cotton was also helped as sales were good, while shipments also picked up a little.”
The US Department of Agriculture (USDA) weekly export sales report showed net sales of 286,400 running bales, down 25% from the previous week but about 5% higher compared with the prior 4-week average. Increases were primarily for China.
Also supporting the market were oil prices that firmed due to record US implied demand and falling crude stockpiles. Higher oil prices make polyester, a substitute for cotton, more expensive.
World cotton production for the 2021/22 season is poised for a full comeback from a disappointing 2020/21 season, led by the United States, the International Cotton Advisory Committee said in its annual report.
It forecast 2021/22 output at 25.71 million tonnes, a 6.01% increase from 2020/21. Also potentially on the radar, the US Commerce Department placed export restrictions on several Chinese companies for several national security reasons.
“The news hasn’t impacted the market yet and it is not clear how it will impact cotton, but it definitely is a concern,” added Varner.
China is a major consumer of US cotton.
Total futures market volume fell by 3,894 to 11,758 lots. Data showed total open interest fell 596 to 232,578 contracts in the previous session
Comments
Comments are closed.