Cotton Closes Higher, Boosted By Weaker Dollar
Cotton Closes Higher, Boosted By Weaker Dollar

Cotton Closes Higher, Boosted By Weaker Dollar

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By Julie Wernau

Cotton futures ended higher, buoyed by a weaker dollar and strong demand for U.S. fiber overseas.

Cotton for March delivery was up 1.5% to end at 79.25 cents a pound on the ICE Futures U.S. exchange, the highest close for the most active contract since May 19.

Commerzbank noted that recently higher oil prices are also playing a part in cotton's rise as they make artificial fibers that compete with cotton more expensive. Just before Christmas, U.S. exports reached their highest level so far this marketing year.

On Tuesday, the International Cotton Advisory Committee, an association for cotton producing, consuming and trading countries, outlined its projections for global supply and demand.

"With a lower international price from the previous season and the rising price of competing fibres, global consumption is expected to grow," ICAC said in a release, projecting a 3% increase in consumption in 2017/2018 to 25.2 million tons.

The firm downgraded its projections over last month for world production of cotton to 25.43 million tons, down 310,000 tons, lowering projected ending stocks to 18.98 million tons.

Speculators have doubled their net bullish bets in cotton and are close to a record achieved in May 2017.

Analysts said a weaker dollar also lured buyers. When the dollar is weak against the currencies of international buyers, it boosts demand for dollar-denominated goods.

The WSJ Dollar Index, which measures the dollar against a basket of currencies, was down 0.2% recently at 85.62.

Raw sugar for March lost 0.4% to end at 15.25 cents a pound, March cocoa was down 0.1% to end at $1,905 a ton, arabica coffee for March ended up 0.7% at $1.2955 and frozen concentrated orange juice for March was off 0.4% to settle at $1.3885 a pound.

Write to Julie Wernau at julie.wernau@wsj.com

Πηγή: foxbusiness.com

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