ICE cotton futures on Monday firmed above three-year lows hit last week as some speculators covered their short positions after intense selling with focus on US-China trade talks. The most-active cotton contract on ICE Futures US, the second-month December contract, settled up 0.29 cent, or 0.46%, at 63.36 cents per lb. It traded within a range of 63.1 and 63.98 cents a lb.
Second month contract touched 61.66 cents, the lowest since May 2016 last Thursday. "Now that we are in the fresh lows you are going to have to make new reasons to sell it off even further," said Jack Scoville, vice president at Price Futures Group in Chicago. "Multi-year lows usually will prompt buying at some point. If all the fundamental news is as dire as they say then you might see people a bit slower to buy that market."
The natural fibre rallied on par with the grains markets earlier on Friday as investors weighed trade talks between the United States and China. Traders pondered whether a call between senior US and Chinese officials would herald progress in ending a trade dispute that has stalled US agricultural exports, including cotton.
Lack of demand, as well as the drawn-out, tit-for-tat tariff war between the United States and China, have pushed cotton prices down more than 14% so far this year. Total futures market volume fell by 2,021 to 19,812 lots. Data showed total open interest gained 1,838 to 197,259 contracts in the previous session. Certificated cotton stocks deliverable as of July 19 totalled 48,641 480-lb bales, down from 49,935 in the previous session.