Cotton futures closed lower on Friday after a climb to a 3-1/2- week high prompted farmer selling and investor profit-taking after three straight days of gains. The most-active March cotton contract on ICE Futures US climbed to 60.91 cents a lb before reversing to close down 0.78 cent, or 1.3 percent, at 59.64 cents a lb.
The contract climbed to the session's high after a surprisingly strong US employment report that also lifted equities and sent the US dollar index to a 5-1/2-year high. The stronger dollar ultimately weighed on cotton as it makes dollar-traded commodities more expensive to holders of other currencies.
-- Second-month prices climb as high 60.91 cents/lb
"The stronger dollar hurt demand ideas," said Jack Scoville, a vice president at Price Futures Group in Chicago. The rally may have also prompted some producers to sell cotton. Farmers in key producers, including the United States, have largely been withholding supply, awaiting a price recovery.
The second-month hit a five-year low of 58.53 cents a lb in late November. Worries lingered over demand in China, the top consumer of many raw materials, including cotton, as Beijing overhauls its agricultural support policies and as the country's economic growth slows. The day's selloff left the second-month with a slight weekly loss, despite strong gains earlier in the week.
Comments
Comments are closed.