NEW YORK: ICE cotton futures were headed for their best year since 2010 as strong demand for the natural fibre was further boosted by a weaker dollar, despite a slight easing on the day due to a weak export sales report.

The cotton contract for March was down 0.17 cent, or 0.2%, at 77.80 cents per lb by 12:17 p.m. EST (1717 GMT). For the year, prices have gained more than 12.5%, their biggest yearly percentage gain since 2010.

“It’s very quiet day. The sales weren’t as spectacular as recent three to four weeks ... and there seems to be a little bit of price resistance at 78 cents,” said Rogers Varner, president of Varner Brokerage in Cleveland.

“Now we have a new price resistance, my guess is that the market will probably consolidate here for a while. But the demand has been robust, much better than I anticipated and the dollar has gone down and the market has reflected that.”

The US Department of Agriculture’s weekly export sales report showed net sales of 287,900 running bales for 2020/2021, down 30% from the previous week and 24% from the prior four-week average.

Cotton prices have gained more than 60% since dropping to multiyear lows in April on overall strong demand for the natural fibre after governments relaxed coronavirus lockdowns.

A broader weakness in the US dollar and an extremely active 2020 Atlantic hurricane season in the United States raising concerns over a supply shortage offered further support to cotton.

A weaker greenback makes cotton less expensive for buyers of the natural fibre in other currencies.

Total futures market volume fell by 12,406 to 8,986 lots.

Certificated cotton stocks deliverable as of Dec. 29 totalled 74,686 480-lb bales, down from 77,326 in the previous session.—Reuters