Cotton prices steady in thin-volume trade ahead of US holiday
Cotton prices steady in thin-volume trade ahead of US holiday

Cotton prices steady in thin-volume trade ahead of US holiday

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ICE cotton futures were mostly unchanged on Wednesday in low volume trade ahead of the US Thanksgiving holiday, while investors awaited further developments on trade negotiations between the United States and China.

Cotton contract for March was flat at 65.95 cents per lb by 01:49 p.m. EST.

It traded within a range of 65.27 and 66.1 cents a lb.

“We were doing well based on positive rhetoric from the Chinese and U.S on the trade deal and now we're not seeing much of that," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.

Some people are squaring up some of their positions ahead of the holiday as well, Brown added.

Prices climbed to a more than one-week high in the previous session after US President Donald Trump said Washington and Beijing were close to an agreement on the first phase of a trade deal.

The United States is one of the world's biggest producers of cotton, while China is the largest consumer.

“Expect prices to stay rangebound in the mid-60s, but could see a spike on a trade deal announcement," said Peter Egli, director of risk management at British merchant Plexus Cotton.

“However, I believe that this would turn into a ‘buy the rumour – sell the fact' situation and that prices over time will trend lower again."

The weekly export sales report from US Department of Agriculture is due on Friday, delayed by a day because of the Thanksgiving holiday on Thursday.

Last week, the USDA in its weekly export-sales report showed net sales of 227,600 running bales (RB) for the 2019/20 marketing year, down 34% from the previous week, but up 20% from the prior 4-week average, for the period ended Nov. 14.

Total futures market volume fell by 11,151 to 13,565 lots. Data showed total open interest gained 1,238 to 198,775 contracts in the previous session.

Certificated cotton stocks deliverable as of Nov. 27 totalled 78,124 480-lb bales, unchanged from 78,124 in the previous session.

Copyright Reuters, 2019


Source: Reuters

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