April 12 (Reuters) – ICE cotton futures settled higher on Friday as traders expected higher demand after reports that China would allow for some imports of cotton in the current year, with a weaker dollar further supporting prices.
* The front-month cotton contract on ICE Futures U.S. settled up 1.13 cent, or 1.5 percent, at 78.11 cents per lb.
* It traded within a range of 76.88 and 78.65 cents a lb, having surged more than 2 percent in the session.
* “We are seeing a pretty good run in cotton, and we are just getting started,” said Jon Marcus, president of the Lakefront Futures and Options brokerage firm in Chicago, adding that reports on China approving an import quota earlier today sparked the rally.
* China’s state planner said on Friday it approved 800,000 tonnes of cotton sliding tariff import quota for 2019.
* This comes in the midst of a long drawn trade war between China and the United States where heavy tariffs curbed free trade between the world’s two biggest economies.
* The United States is the world’s biggest cotton exporter, while China is the top consumer.
* Meanwhile, helping cotton prices further was a weaker dollar . A stronger greenback makes commodities priced in dollars, such as cotton, more expensive for holders of other currencies.
* Cotton had hit a high of 79.31 cents on April 9, a level it had last touched in mid December
* “Cotton is seeing a psychological resistance level at 80 cents. This could be a start of a technical run to the 83-84 cent level,” Marcus added.
* However, the contract inched 0.2 percent lower this week, snapping seven robust weeks of gains, with weaker U.S. data pressuring rates.
* Total futures market volume rose by 3,266 to 63,040 lots. Data showed total open interest fell 2,980 to 216,476 contracts in the previous session
* Certificated cotton stocks <CERT-COT-STX> deliverable as of April 11 totaled 52,952 480-lb bales, up from 52,374 in the previous session.
(Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Sandra Maler)