Cotton prices inched down on Thursday as top consumer China canceled orders of US fiber and on forecast for a bumper harvest, although losses were limited by data showing higher US export sales. Cotton contracts for December settled down 0.17 cent, or 0.28 %, at 60.33 cents per lb. It traded within a range of 60.28 and 61.13 cents a lb.
"The export sales are below expectations mostly due to cancellations from china and the weather is really good, boosting crop conditions," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi. Weekly data from the US Department of Agriculture (USDA) on Thursday showed net sales of 85,000 running bales, up 14% from what was reported last week. The report also showed reductions of about 39,000 from China.
The slowdown in China's economy deepened in August, with growth in industrial production at its weakest 17-1/2 years amid spreading pain from a trade war with the United States and softening domestic demand. China is the biggest consumer of cotton and US is the biggest exporter.
Prices have fallen nearly 18% so far this year on the backdrop of the protracted trade war between the United States and China, one the leading consumers of the natural fiber. "If the market can hold about the 60 levels in the next couple of days, it can touch 64.30 levels next week," said Louis Barbera, partner and analyst at VLM Commodities Ltd. Total futures market volume fell by 5,293 to 18,676 lots. Data showed total open interest gained 199 to 230,791 contracts in the previous session.
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