Cotton futures rose to a near three-week high on Wednesday as the number of coronavirus cases dropped in China, easing fears of an economic slowdown in the world's second-largest economy. Cotton contracts for May rose 0.97 cent, or 1.4%, to 69.84 cents per lb by 1:29 pm EST (1829 GMT).
Earlier in the session prices rose to 70.24 cents per lb, a level last seen on January 30. “China has reported that number of infected cases are going down … It has also reduced tariff on various products including cotton," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.
“Once China gets out of the coronavirus issue, she will need supplies and that will lead to a rally," Brown added. Mainland China had 1,749 new confirmed cases of coronavirus infections on Tuesday, the country's National Health Commission said on Wednesday, down from 1,886 cases a day earlier and the lowest since January 29, easing fears.
The outbreak has forced China to halt its day-to-day activities including at schools, offices and factories, sparking fear of an economic slowdown in the world's biggest consumer of the natural fiber.
Also supporting prices, China has decided to grant exemptions on retaliatory duties imposed against 696 US goods, the most substantial tariff relief offered so far.
Total futures market volume fell by 19,566 to 35,633 lots. Data showed total open interest fell 4,976 to 206,890 contracts in the previous session. Certificated cotton stocks deliverable as of February 18 totaled 33,259 480-lb bales, up from 32,361 in the previous session.