ICE cotton edged lower on Tuesday ahead of a US government report expected on Wednesday that traders said could suggest an increase in production, and on the impact of a modest recovery in the dollar. The front-month May cotton contract on ICE Futures US dipped 0.14 cent, or 0.2 percent, to settle at 63.91 cents a lb.
Traders looked ahead to a US Department of Agriculture report expected to be released Wednesday at noon indicating how many bales of cotton have been ginned so far this season.
The USDA said in its most recent supply-demand report earlier this month that the United States would produce 16.08 million 480-lb bales of cotton in the 2014/15 crop year, which ends in January.
The most recent cotton ginning report, published Feb. 10, showed that 15.5 million bales of US cotton had been ginned so far.
Traders said the report could show a slight uptick in the pace of ginning, suggesting that the current US cotton crop could be modestly higher than the USDA is currently anticipating.
"If we've classed these bales, then they should show up on the ginning report," said Louis Rose, an independent cotton trader and consultant at Risk Analytics in Memphis, Tennessee.
The losses largely came later in the session, after the US dollar rebounded against a basket of currencies after earlier losses.
A stronger dollar weighs on greenback-traded commodities like cotton by making them more expensive to holders of other currencies.
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