ICE cotton futures dropped on Tuesday on a stronger dollar, and as traders sought details regarding the potential “phase one" trade deal between the two largest economies. Cotton contracts for March fell 0.27 cent, or 0.40%, at 66.70 cents per lb by 11:11 a.m. EST (1611 GMT). It traded within a range of 66.58 and 67.07 cents a lb.
The market has got enough support where it is, but it is “going to need something to boost it higher," said Jim Nunn, owner of Tennessee cotton brokerage Nunn Cotton.
We need the contracts to go back above the 200-day moving average to get any kind of momentum, Nunn added.
US Trade Representative Robert Lighthizer said that details regarding Chinese purchases from the US across agriculture and other sectors would be detailed in writing in the “phase one" trade deal with China.
Under the trade agreement announced last week, US will reduce some tariffs on Chinese imports in return for China committing to purchasing additional US products and services.
The dollar index, which measures the greenback against six currencies, rose by 0.13%.
Certificated cotton stocks deliverable as of Dec. 16 totaled 19,737 480-lb bales, down from 19,889 in the previous session.
Total futures market volume fell by 16,236 to 10,822 lots. Data showed total open interest gained 2,330 to 205,004 contracts in the previous session.