ICE cotton futures climbed more than 1 percent on Friday to a one-week high, lifted by optimism over a possible trade deal between the United States and China, and fund buying. The most active cotton contract on ICE Futures US, the May contract, settled up 1.03 cent, or 1.41 percent, at 73.85 cents per lb.
The second-month contract hit its highest level since Feb. 22, at 73.95 cents, and notched a weekly gain of 1.2 percent, its second straight weekly gain. "Cotton is inching upwards due to optimism over the trade war," said Gabriel Crivorot, an analyst at Societe Generale in New York, adding that prices spiked at the end of the day on fund buying.
After President Donald Trump delayed a deadline that would have triggered higher tariffs on Chinese imports, Bloomberg reported on Thursday that a summit between Trump and his Chinese counterpart Xi Jinping to sign a final trade deal could happen as soon as mid-March. On Wednesday, US Trade Representative Robert Lighthizer said Trump's team is pushing China to promise to make "substantial" new purchases of US products, including soybeans, corn, ethanol and cotton.
"We have been getting a few more details from US officials each day, which indicates that there may be substance to the rumors that the sides are getting closer to a deal," Crivorot said. The United States is the world's biggest cotton exporter, while China is the top consumer.
Total futures market volume rose by 2,270 to 22,608 lots. Data showed total open interest gained 1,175 to 222,149 contracts in the previous session. Certificated cotton stocks deliverable as of Feb. 28 totaled 131,035 480-lb bales, up from 130,935 in the previous session.
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