ICE cotton edged down on Friday and slid to a weekly loss, weighed by falling financial markets and investor profit taking, worry over lower demand in China, and reduced concern over the crop in the United States, the world's top exporter.
The benchmark December cotton contract on ICE Futures US edged down 0.87 cent, or 1 percent, to settle at 85.12 cents per lb and finish the week down about 1.2 percent. Cotton came down with financial markets as investors booked profits, though fiber pared losses that pushed it to an intraday low of 84.76 cents.
-- Exchange stocks plummet to lowest since early February "The market was on the run, you had people taking profits," said Ron Lawson, a partner at commodity investment firm LOGIC Advisors. China's plans for value-added taxes sparked some concern among merchants this week over reduced demand for foreign cotton in the world's top textile market, in spite of Beijing's efforts to ease concerns the taxes will hurt exporters.
The country's voracious appetite for foreign cotton is actively eyed by traders as a government stockpiling programme begun in 2011 has boosted global consumption. Dealers eyed the US Department of Agriculture's weekly progress report expected on Monday for signs of crop improvement in Texas, the biggest producing state, as drought concerns have eased. "The rain last week wasn't reflected in this week's report. That's weighing on prices," said a US broker.
Prices are likely to fall in 2013/14, but lower US inventories ahead of new supplies will keep prices elevated at the start of the crop year that begins in August, a group of industry experts said during the Ag Market network's annual radio programme from New York.Another big drop pushed exchange stocks to the lowest level since early February, according to the most recent ICE data, buffering prices from steeper losses on Friday, traders said.
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