ICE cotton fell to a more than three-week low on Monday on expectations of higher production in the United States and as the dollar strengthened. Cotton contracts for December settled down 0.5 cent, or 0.73 percent, at 67.75 cents per lb. They traded in a range of 67.57 and 68.54 cents a lb. Prices hit their lowest since July 21 at 67.57 cents.
"The first survey of US 2017 crop production indicates a crop of 20.5 million bales, 1.5 million above last month and the largest production in 11 years," the US Department of Agriculture said in its monthly World Agricultural Supply and Demand Estimates last week. "Outside of a major weather event occurring, it now seems that US production for 2017 moving significantly below 20 million bales is unlikely," said Louis Rose, co-founder and director of research and analytics at Rose Commodity Group.
USDA projected world 2017-18 ending stocks at 90.1 million bales, an increase of 1.4 million bales from the July forecast, and 100,000 above 2016-17. "The market has to digest and make what it will of the 20.55 number for now. If the September (USDA) numbers continue to validate a more than 20 million bale crop, then prices could decline further,"
Don Shurley, cotton economist, professor emeritus of cotton economics at University of Georgia wrote in a note. The dollar index was up 0.37 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 1.17 percent. Total futures market volume fell by 11,180 to 16,959 lots. Data showed total open interest fell 2,377 to 219,210 contracts in the previous session. Certificated cotton stocks deliverable as of August 11 totalled 19,342 480-lb bales, down from 19,430 in the previous session.