Cotton futures up but mark worst month in two years

30 Jun, 2018

ICE cotton futures edged up on Friday, supported by a bullish acreage report, even as the natural fibre crop marked its worst monthly performance in nearly two years amid concerns over trade tensions between the United States and China.
The most active cotton contract on ICE Futures US, the third-month December contract, settled up 0.37 cent, or 0.44 percent, at 83.92 cents per lb. It traded within a range of 83.35 and 85.86 cents a lb.
"The acreage estimate was a little lower than expected, which was slightly bullish," said Gabriel Crivorot, an analyst at Societe Generale in New York.
The US Agriculture Department's Annual Acreage report estimated all cotton planted acres at 13.518 million, which was below analysts' estimate of 13.781 million acres and marginally higher than the USDA's March forecast of 13.469 million.
More than half of the expected acreage area is in Texas where drought is forcing abandonment, said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity.
The third month contract rose nearly 6 percent for the second quarter. The contract, however, was down 1.6 percent for the week, and also marked its worst month since August 2016 having tumbled over 8 percent as trade tensions between US, the world's biggest cotton exporter, and top consumer China weighed on the market.
Speculators cut their net long position in cotton by 5,975 contracts to 87,069 in week to June 26, US Commodity Futures Trading Commission data showed on Friday.
Total futures market volume rose by 8,011 to 25,025 lots. Data showed total open interest gained 621 to 257,028 contracts in the previous session.
Certificated cotton stocks deliverable as of June 28 totalled 92,799 480-lb bales, up from 91,960 in the previous session.

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