NEW YORK: ICE cotton futures extended their losing streak to a third session on Tuesday on expectations for rainfall in West Texas, ahead of a closely watched federal supply and demand report.
Cotton contracts for July, fell 0.81 cents, or 0.9%, to 87.66 cents per lb by 12:51 p.m. EDT (1651 GMT)
“Chances of rain out in West Texas are weighing on the market,” but it is also in a “wait and see” position for tomorrow’s World Agricultural Supply and Demand Estimates (WASDE) report, said Jim Nunn, owner of Tennessee cotton brokerage Nunn Cotton.
“We need 10 days of dry weather in the northern delta or we could lose a crop. We need to be able to get the bulk of this crop planted by the 25th of May,” Nunn added.
The US dollar eased on Tuesday, making it less expensive for buyers holding other currencies to purchase greenback-priced cotton, helping demand, and capping losses in the natural fiber.
Market participants now await the WASDE report from the US Department of Agriculture (USDA), due on Wednesday.
April WASDE report projected higher estimates for US exports for the 2020/21 marketing year, leading to expectations for a tight market. Prices have climb 9.8% since the report.
The USDA’s weekly crop progress report on Monday showed 25% of the total 2021 cotton crop was planted in the week ending May 9, slightly under the five-year average of 26%.
Source: Reuters