ICE cotton rose on Thursday on mill buying after the price fell below the prior session's low, and due to support from gains in the crude oil market and the US dollar's declines. The most-active May cotton contract on ICE Futures US rose 0.65 cent, or 1 percent, to settle at 62.81 cents a lb.
Front-month March cotton gained 0.46 cent, or 0.7 percent, to settle at 62.48 cents a lb. Cotton initially fell after the release earlier on Thursday of the US Department of Agriculture's (USDA) weekly export sales figures, which showed new sales of 52,200 bales in the week ended February 5, down nearly 90 percent from both the previous week and the prior four-week average.
Shipments of cotton once again hit a marketing-year high at 289,700 bales. A decline in sales was widely expected, traders said, as US producers have already sold nearly 90 percent of the 10.7 million bales the USDA expects to be exported in the 2014/15 crop year, which ends July 31. In addition, demand for cotton was likely limited by higher prices last week. "The price rally damps a lot of interest," said Sharon Johnson. "As much as the sales numbers weren't equal to what we've seen of late, that level wasn't sustainable."
The May contract turned positive after taking out the prior session's low of 61.91 cents a lb and approaching the 10-day moving average of 61.76 cents, Johnson said, as some mills found those prices attractive levels for buying in a market they see continuing to rise.
A rise in crude oil prices and a fall in the US dollar against a basket of currencies contributed to fiber's turnaround later in the session, she added. A weaker dollar supports greenback-traded commodities like cotton by making them less expensive to holders of other currencies.
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