Cotton prices rose more than 1% on Tuesday, to their highest level in over two weeks, as investors covered short positions, while unfavourable weather in crop planting areas across states supported prices. Cotton contracts for July settled up 1.08 cent, or 1.6 %, at 69.47 cents per lb. It traded within a range of 68.46 and 69.5 cents a lb. The front month contract touched its highest level since May 10 at 69.50 cents per lb earlier in the session.
Speculators were covering shorts, "every time the market got to 65 or 66 cents, you had very brusque uptake in US cotton," said Ed Jernigan, chief executive of Jernigan Global, a cotton textile supply chain manager. Crop planting areas of West Texas and Oklahoma have been wet following storms over the weekend, while Southeast United States has been receiving heat. This has also helped prices, Jernigan added.
Poor weather conditions in the Midwest and Plains also propelled strong gains in the grains markets on concerns that farmers will be pressured to curtail their plantings this spring. Meanwhile, keeping investors weary was US President Donald Trump's statement on Monday that Washington was not ready to make a deal with Beijing.
The July contract rose 3.5% last week, marking its best week since mid-July and snapping five straight weekly sessions of declines. Total futures market volume rose by 9,850 to 34,320 lots. Data showed total open interest fell 72 to 214,852 contracts in the previous session. Certificated cotton stocks deliverable as of May 24 totalled 85,063 480-lb bales, up from 81,816 in the previous session.
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