June 10 (Reuters) - ICE cotton futures fell on Friday, pressured by concerns over lower demand as inflation-led fears seeped into the natural fiber market while investors also gauged mixed projections from a federal monthly supply-demand report.
The most-active December cotton contract on ICE Futures CTZ2 fell 2.13 cents, or 1.70 percent, at 122.80 cents per lb as of 02:21 A.M. EDT.
Dimming appetite for cotton by making it more expensive, especially for overseas buyers, the dollar rallied after data showed U.S. consumer prices accelerated in May, suggesting the Federal Reserve may have to continue with interest rate hikes through September. USD/
Also, the University of Michigan's survey showed U.S. consumer sentiment plunged to a record low in early June.
"We had a big inflation number... That suggests a global recession is coming" along with possible supply disruptions, and in addition, higher interest rates, which are all negative factors overall, said Keith Brown, principal at cotton broker Keith Brown and Co in Georgia.
Meanwhile, the USDA numbers were identical to those of last month and mostly would be of little consequence to the market, Brown added.
The U.S. Department of Agriculture (USDA) left its 2022/23 U.S. cotton supply and demand projections unchanged from last month, but outlined slightly higher production and slightly lower consumption compared with the previous month, with ending stocks virtually unchanged.
"Beginning stocks for 2022/23 are also lower this month as a 1.5-million-bale decline in 2021/22 global production more than offsets a 1.25-million-bale decline in projected consumption," the USDA said.
Further, top buyer China's 2021/22 imports were projected to drop more than 4.3 million bales from the previous year to 8.5 million, although 2022/23 imports were seen rising 2.0 million bales to 10.5 million, remaining the world's largest for the third consecutive year, the USDA added.
(Reporting by Rahul Paswan in Bengaluru)
Source: nasdaq.com