ICE cotton futures rose over 1 percent on Wednesday to snap a three-day losing streak, buoyed by short-covering amid an easing dollar. "Some fresh businesses came in... we probably also had some merchants covering shorts ahead of tomorrow's US export sales report," said Louis Rose, an independent cotton trader and consultant with Risk Analytics in Memphis, Tennessee.
The March cotton contract on ICE Futures US recorded the biggest one-day percentage gain since December 12 rising 1.14 percent to 70.13 cents per lb. "We think that physical buying interest maybe behind today's rally," said Michael McDougall, director of commodities for Societe Generale in New York. "The market failed to take out Monday's high (71.0 cents), which keeps the market on the defensive."
The dollar retreated from a 14-year high with some traders reducing their holdings of the currency on profit-taking in light volume ahead of a big batch of US economic data due on Thursday and the Christmas holiday. March cotton contract on ICE Futures US settled up 0.79 cent, or 1.14 percent, at 70.13 cents per lb. It traded within a range of 69.34 and 70.92 cents a lb.
Total futures market volume rose by 10,361 to 29,200 lots. Data showed total open interest fell 3,486 to 243,889 contracts in the previous session. The dollar index was down 0.27 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 0.11 percent. The market awaited US exports sales data due on Thursday.
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