New York cotton slips as lack of China sales weigh

26 Jul, 2019

ICE cotton futures inched down on Thursday, snapping a four-session gaining streak, as improved weekly export sales numbers were offset by lack of buying from China. The most-active cotton contract on ICE Futures US, the second-month December contract, settled down 0.13 cent, or 0.20%, at 64.19 cents per lb. It traded within a range of 63.97 and 64.68 cents a lb.
The second-month contract touched its highest level in two weeks at 64.68 cents, earlier in the session. "It was a good export sales report... (But) The market is a few points lower as we did not really see any sales or shipments to China. Traders are looking to see an increase in sales to China," said Bailey Thomen, cotton risk management associate with INTL FCStone.
Weekly export sales report from the US Department of Agriculture showed net sales of 163,000 running bales (RB) for 2018/19 were up noticeably from the previous week, while exports of 318,000 RB were up 3%. Meanwhile, market participants are keeping a close watch on developments from the long drawn tit-for-tat tariff war between Washington and Beijing.
Top US and Chinese negotiators will meet face-to-face next week for the first time since the countries' leaders agreed in June to revive talks aimed at ending a year-long trade war between the world's two largest economies.
Lack of demand, as well as the drawn-out tariff war between the United States and China, has pushed cotton prices down about 13% so far this year. Total futures market volume fell by 4,121 to 12,359 lots. Data showed total open interest fell 598 to 196,013 contracts in the previous session. Certificated cotton stocks deliverable as of July 23 totalled 44,547 480-lb bales, down from 45,089 in the previous session.

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