Cotton futures mark over six-week low

ICE cotton futures nudged lower on Tuesday to hit an over six-week low ahead of a federal holiday, amid a trade dispute between the United States, the world's biggest cotton exporter, and top consumer China which continued to pressure the market.
The most active cotton contract on ICE Futures US, the third-month December contract, settled down 0.12 cent, or 0.14 percent, at 82.81 cents per lb. It traded within a range of 82.6, its lowest since May 18, and 83.66 cents. "It is the day before the Independence Day holiday in the US.
Speculators won't be taking big positions and move the market," said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity. Meanwhile, traders were eyeing a July 6 deadline for US tariffs on $34 billion worth of Chinese goods to kick in, posing danger of a strong response from Beijing.
China is putting pressure on the European Union to issue a strong joint statement against US President Donald Trump's trade policies at a summit later this month but is facing resistance, European officials said. "The immediate concern, come July 6, is whether Chinese buyers will look to cancel previously bought cotton this season - a bearish factor if it materialises," analysts at Rabobank said in a note.
Rabobank sees the current US-China trade impasse as another major short-term price driver, with China introducing a retaliatory 25 percent tariff on US cotton imports as early as July 6, they said. The US Department of Agriculture in its weekly crop progress report released on Monday showed the 2018 US cotton crop was 43 percent in good or excellent condition compared with 42 percent a week ago and 54 percent last year.
Total futures market volume fell by 2,080 to 22,000 lots. Data showed total open interest gained 149 to 257,426 contracts in the previous session. Certificated cotton stocks deliverable as of July 2 totalled 91,766 480-lb bales, unchanged from 91,766 in the previous session. ICE Futures US soft agricultural commodity futures and options markets will be closed on Wednesday for the Independence Day holiday.