ICE cotton futures rose nearly 1% on Wednesday to their highest in two weeks on renewed hopes that China and the United States could take steps to resolve their trade war when negotiators meet face-to-face next week.
The most-active cotton contract on ICE Futures US, the second-month December contract, settled up 0.59 cent, or 0.93%, at 64.32 cents per lb.
It traded within a range of 63.52 and 64.67 cents a lb, its highest since July 9.
"The market is trying to express some optimism about the US-China trade meeting in Shanghai. It is a combination of expectations for the trade talks and the fact that the market is extremely oversold," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.
Top US and Chinese negotiators will meet face-to-face next week for the first time since the countries' leaders agreed in June to revive talks aimed at ending an year-long trade war between the world's two largest economies.
Lack of demand, as well as the drawn-out tariff war between the United States and China, has pushed cotton prices down about 13% so far this year.
The improved conditions for the US crop has added to worries of higher output amid the natural fibre battling demand woes. "The crop in the US is at 22 million bale crop, a 14-year high and that crop is rated 60% good-excellent - so that is a very robust crop," Brown added.
The United States is one of the biggest producers of the natural fibre, while China is the largest consumer. Meanwhile, investors await the release of the US Department of Agriculture's (USDA) weekly export sales data, due on Thursday. Total futures market volume rose by 1,457 to 16,369 lots. Data showed total open interest fell 1,365 to 196,611 contracts in the previous session. Certificated cotton stocks deliverable as of July 23 totaled 44,547 480-lb bales, down from 45,089 in the previous session.
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