Cotton up as rain forecasts offset weak export sales data

ICE cotton bounced back from a near one percent drop initially to settle higher for the third straight session on Thursday as forecasts for rain in the cotton-belt areas of the United States offset poor export sales data. Weekly export sales report from the US Department of Agriculture (USDA) showed net upland sales totalled 136,400 running bales of cotton for the week ended September 8, compared with 344,500 running bales in the prior week.
"Today, sales were poor, shipments were also poor and the surprise was Pakistan and India bought almost no cotton," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi. Net sales of Pima cotton for 2016/2017 for India fell to 5,900 running bales last week from 8,100 running bales in the week earlier, while those for Pakistan declined to 900 running bales from 2,100 running bales of the natural fibre during the same period.
However, forecast for rain in the cotton belt in the United States were supportive of prices, Varner added. The second month December cotton contract on ICE Futures US settled up 0.19 cent, or 0.28 percent, at 67.72 cents per lb. It traded within a range of 66.82 and 67.95 cents a lb. The dollar index was down 0.05 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 0.66 percent.
Total futures market volume fell by 5,648 to 10,449 lots. Data showed total open interest gained 906 to 231,339 contracts in the previous session. ICE cotton marked its biggest one-day gain in more than a week on Wednesday on weather concerns in major producers, including the United States and China, and on a softer dollar.
Super Typhoon Meranti, believed to be the world's strongest storm this year, is expected to make landfall in the southern Chinese provinces of Guangdong and Fujian on Thursday. Meanwhile, tropical storm Julia dumped heavy rains along coastal Georgia and South Carolina in the United States on Wednesday.
"While we have already accounted for much of the damage due to Julia, I think the bigger concern is the typhoon heading to China, which is keeping the sellers away," said Jobe Moss, a broker with MCM Inc in Lubbock, Texas. The December cotton contract on ICE Futures US settled up 0.63 cent, or 0.94 percent, at 67.53 cents per lb, the biggest one-day gain for the natural fibre since September 6. The dollar index was down 0.32 percent * Total futures market volume fell by 7,193 to 15,841 lots. Data showed total open interest gained 209 to 230,433 contracts in the previous session.