NEW YORK (Dow Jones)--Cotton prices floated higher in consolidation Monday,
lifted along with most commodities as the dollar weakened on stronger European
economic outlooks.
Nearby cotton for July delivery ended up 1.02 cent, or 1.3%, at 82.56 cents a
pound on ICE Futures U.S. The most-active December contract settled 0.53 cent,
or 0.7%, higher at 79.47 cents.
Cotton continues to hold near recent highs as tight supplies and unwavering
demand boost the market. World cotton demand is expected to outpace production
for the marketing year ending July 31 by 13% as demand rebounds with the global
economy. In the coming season, production is still expected to fall 4.5% short
of demand.
Macroeconomic outlooks turned bullish Monday as April euro-zone industrial
production data showed the sharpest year-on-year increase since 1990.
Uncertainty about European debt had stifled investors' risk appetites. But
those speculators, such as banks and hedge funds, sped out of the safe-haven
dollar Monday. Traders sought riskier bets. The weak greenback also made
commodities, like energy, agricultural products and industrial metals, less
expensive in other currencies. Consumers in strong, stable economies often have
more discretionary income to purchase cotton textiles.
Weather conditions are likely to guide the market as traders watch the
development of the crop that will be harvested in the fall, one cotton
broker/analyst said. Those conditions indicate potential production in the next
season.
The U.S. cotton crop was rated 62% in good-to-excellent condition in the week
to June 6, down from 66% last week, U.S. Department of Agriculture data show.
The U.S. is the top cotton exporter and the No. 3 producer.
Economic stability also will continue to guide the market as it affects
textile consumption and traders' risk appetite, the broker/analyst said.
ICE daily cotton stocks decreased by 1,960 500-pound bales Friday to total
796,527, with 1,954 decertification orders, according to exchange data.
ICE cotton open interest--the number of active positions left at the end of
the session--fell by 4,788 positions Friday to total 172,219, according to the
exchange.
Volume was estimated at 24,087 lots. In options, approximately 1,825 calls
and 2,018 puts traded on the floor, according to exchange data.
Close Change Range
Jly 82.56 +1.02 81.38-83.04
Oct 79.15 +0.62 78.53-79.66
Dec 79.47 +0.53 78.79-79.64