ICE cotton futures eased on Wednesday, as selling ahead of the US Independence day holiday reversed an early rise of nearly 1%. The most-active cotton contract on ICE Futures US, the third-month December contract, settled down 0.04 cent, or 0.06 %, at 67.25 cents per lb. "There is no buying out there, it is a quiet day. It is the day before holiday so, people are pushing around making a little money," said Jim Nunn, owner of Tennessee cotton brokerage Nunn Cotton.
"The path with least resistance is still lower as we have got a big US carry over," Nunn said. The contract rose as much as 0.9% earlier in the session to touch its session high of 67.90 cents. Prices rose as "China acknowledged that it may buy some US farm products even before a deal is done so, the market sort of leaned on that," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.
After his meeting with Chinese President Xi Jinping at the G20 summit in Japan, US President Donald Trump said Beijing has agreed to buy US farm products and resume trade talks. The natural fiber surged as much as 3% on Monday to touch its highest level since May 31 at 68.35 cents per lb, after Trump's comments. White House economic adviser Larry Kudlow on Wednesday said that top representatives from the United States and China will meet in the coming week to continue trade talks between the world's largest economies.
The United States is one of the biggest producers of the natural fiber, while China is the largest consumer. Lending some support to prices were crop concern in India, China and Pakistan, Keith said. "China has the army worm infestation, India's monsoon is running behind and in Pakistan about two million acres have been affected by Locust worm."
Indian farmers have planted 14.7 million hectares with summer-sown crops, down almost 10% from the previous year, the farm ministry's data showed on Friday, as weak monsoon rains delayed sowing in most parts of the country. ICE Futures US soft agricultural commodity futures and options markets will be closed Thursday for the Independence Day holiday. Total futures market volume fell by 10,590 to 15,646 lots. Data showed total open interest gained 2,654 to 178,400 contracts in the previous session.
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