ICE cotton slipped to an eighth straight daily loss on Tuesday in the longest rout in more than six months as investors exited on forecasts for rain in key growing regions of Texas, the top-producing US state, and on signs of increasing supplies. The most-active July cotton contract on ICE Futures US closed down 0.15 cent, or 0.2 percent, at 89.15 cents a lb after sinking as low as 88.71 cents, a more than five-week low for the front month.
Forecasts for much-needed rains in West Texas, expected by some to provide relief to farmers and crops in the drought-ridden state, weighed on the market. Also, the US government releases its weekly report on Thursday morning with traders expecting an increase in export sales from the previous week's levels due to falling prices.
"People are going to be cautious on new positions until (Thursday's) export report, and you're looking at some rains this weekend," said Louis Rose, an independent cotton trader and consultant at Risk Analytics in Tennessee. ICE stocks continued their climb, rising to 413,500 bales on Monday from 411,200 previously, the most recent ICE data showed. That was the highest level since July. Cash prices have come down as farmers in the Southern Hemisphere are harvesting crops, Rose said.
A weekly US government crop report released after the market close on Monday also weighed as it showed farmers in the world's top exporter had sped up planting. About 46 percent of the cotton crop had been sown by the week ended May 18, well ahead of the 37 percent progress during year-before period but still slightly behind the previous five-year average of 48 percent. Even so, trade short-covering kept prices from steeper losses as mills fixed prices on previously bought bales and spied price dips as new buying opportunities, traders said.
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