Cotton on ICE Futures US fell on Friday to the biggest weekly loss since November as the strong US dollar reinforced worries about demand. The front-month May cotton contract on ICE closed down 0.72 cent, or 1.2 percent, at 60.50 cents a lb, after trading near Thursday's five-week low of 60.26 cents throughout much of the day. The front-month has finished down 11 of the last 12 sessions. It slid to a 3.9 percent weekly loss this week, amid a broad commodities selling spree.
The bellwether Thomson Reuters/Core Commodity CRB index sank to its lowest level since 2009. The greenback continued to rally against a basket of major currencies, with the dollar index touching its highest level since April 2013. The appreciation makes dollar-traded commodities more expensive to holders of other currencies. "Any way you look at it, this high dollar is here. The ramifications (on demand) are coming," said Jobe Moss, a broker with MCM Inc in Lubbock, Texas.
A monthly US government forecast reinforced bearish sentiment. The US Department of Agriculture (USDA) upped its outlook for inventories to hit a record of over 110 million 480-lb bales by the end of July, as it cut its forecast for demand in China, the world's largest consumer. Cotton futures in China also fell on Friday. China opposes plans by Intercontinental Exchange in Singapore to launch cotton and white sugar futures contracts, an official said on Friday.
The May contract moved back toward technically oversold territory, with its 9-day relative strength index slipping to 30.4, from 34.8 previously. A weekly government report was expected to show that speculators have begun to unwind a bullish bet in fiber.
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