NEW YORK: Cotton gained for a ninth straight session on Wednesday, hitting a 2-1/2-year peak on hopes that demand for the natural fibre would rise as the global economy recovers, while supplies remain limited.
Cotton contracts for May rose 0.64 cent, or 0.69% at 93.31 cents per lb, at 12:15 p.m. ET (1715 GMT). It traded within a range of 92.14 and 93.63 cents a lb, which was their highest since early June 2018.
“We are still looking at relatively tight supplies and a reduction in the carryover... that’s how you get bullish markets,” said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.
Prices are certainly not going down to discourage US acreage and part of that is due to dryness in some regions, Love said, adding that an upbeat grains and stock markets also encouraged speculators to pick-up cotton.
US corn and soyabean futures rose on Wednesday as storms in major production areas of Brazil disrupted fieldwork, which threatened to slow export shipments from one of the world’s major suppliers.
The S&P 500 and Dow Jones also gained on the back of hopes of a quicker economic recovery that supported cyclical stocks.
On the technical front, the overall standard daily technical analysis for the May contract remains bullish, with the market also remaining overbought, Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
Total futures market volume fell by 13,946 to 16,128 lots. Data showed total open interest gained 1,596 to 249,805 contracts in the previous session.