REUTERS: Cotton drops to 19-month low on robust dollar, weak demand

REUTERS: Cotton drops to 19-month low on robust dollar, weak demand

June 10 (Reuters) -ICE cotton futures slipped to their lowest level in 19 months on Monday, hurt by lower demand and the U.S. dollar rising to its highest level in nearly a month, making the natural fibre more expensive for foreign buyers.

* Cotton contracts for July CTc1 fell 2.04 cents, or 2.76%, at 71.8 cents per lb by 12:33 p.m. ET (1633 GMT). Cotton hit its lowest since Oct. 31, 2022.

* The dollar index gained 0.3% and rose to its highest level since May 14, making cotton more expensive for overseas buyers.USD/

* "There is no demand or little demand as evidenced by last week's export sales," said Keith Brown, principal at cotton broker Keith Brown and Co. in Georgia.

* The U.S. Department of Agriculture's USDA weekly report on Thursday showed exports of 157,000 running bales (RB), down 9% from the previous week and 27% from the prior four-week average. EXP/COT

* Unless the string of data due this week offsets last week's strong jobs data, "the market would conclude that there will be no interest rate reduction this year in the United States and that would keep the dollar stronger and hurt cotton as a result," Brown added.

* Dampening sentiment, Wall Street slipped as wary investors steered clear of risky assets ahead of a key inflation reading and a meeting of the Federal Reserve this week. .N

* Market participants are now awaiting USDA's monthly World Agriculture Supply and Demand Estimates (WASDE) report due on Wednesday.

* Elsewhere in the grains market, Chicago wheat fell, hovering close to five-week lows, while corn rose after Friday's losses, and soybeans fell.GRA/

* Cotton speculators increase the net short position by 11,946 contracts to 32,363 in week to June 4.

Reporting by Anushree Mukherjee in Bengaluru; Editing by Ravi Prakash Kumar

Source: Reuters
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