Cotton marks highest since mid-June

ICE cotton futures rose to their highest levels since mid-June on Friday, supported by strong demand for the US crop. The December cotton contract on ICE Futures settled up 0.46 cent, or 0.66 percent, at 70.62 cents per lb. It hit its highest since June 15 at 70.83 cents per lb.
"Cotton is higher because actual US exports have surpassed the USDA's 14.5 million bales projection for 2016/17," said Louis Rose, co-founder and director of research and analytics at Rose Commodity Group. The US Department of Agriculture on Thursday showed upland cotton exports of 275,300 bales for last week.
"We estimate that the final export number will be at 14.9 million statistical bales, or 0.4 million bales higher than the current USDA estimate, which will drop US ending stocks for the 2016/17-season to just 2.8 million bales," Plexus Cotton said in a note. "US cotton is already relatively cheap on the international front and dollar weakness adds further to its attractiveness."
Analysts, however, expect gains to be limited ahead of the release of the monthly World Agricultural Supply and Demand Estimates (WASDE) report by the US government next week. The dollar has suffered in recent months, largely on increased doubts that the Federal Reserve would raise interest rates again this year and obstacles to US President Donald Trump's pro-growth agenda.
The December contract rose about 2.6 percent this week to register the third successive weekly gain. Cotton prices have gained over 7 percent since hitting a 10-month low of 66.15 cents per lb on June 26. "There is a lot of buying waiting near the recent lows, as unfixed on-call sales have already reached 10.99 million bales. We therefore feel that the market will remain confined to a 67-72 cents trading range in the foreseeable future," Plexus Cotton said.
Total futures market volume rose by 475 to 18,054 lots. Data showed total open interest fell 503 to 216,836 contracts in the previous session. Speculators increased net long position in cotton by 2,806 contracts to 20,057 contracts in the week to August 1 on ICE Futures US, US Commodity Futures Trading Commission data showed on Friday. Meanwhile, China will launch cotton yarn futures on Zhengzhou Commodity Exchange on August 18, the Securities Times reported on Friday, citing the country's securities regulator.