REUTERS: Cotton futures dip

REUTERS: Cotton futures dip

NEW YORK: ICE cotton futures fell on Friday, weighed down by expectations of excess supply in the market and a rebound in dollar, though the natural fibre was still on track for its biggest weekly gain in three. Cotton contracts for December fell 0.30 cent, or 0.5%, to 64.22 cents per lb by 1:43 p.m. EDT (1743 GMT), after touching a near two-week peak in the previous session.

Prices were, however, on track to register a second straight week of gains, up over 2% so far this week.

"There is talk of a big crop coming, last week USDA raised the crop by 500,000 bales. The market was looking for 17.2 million... so that sort of blunted the momentum," said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.

In its monthly World Agriculture Supply and Demand Estimates (WASDE) report on Aug. 12, the US Department of Agriculture (USDA) raised its US production estimate for the 2020/21 crop to 18.1 million bales from 17.5 forecast in July.

Also, weighing on prices, the dollar index climbed on Friday, headed for its first weekly rise since mid-June.

"The stronger dollar is weighing a bit on prices, but I believe that this is temporary and dollar weakness will continue as we approach the US elections," Peter Egli, director of risk management at British merchant Plexus Cotton.

The market is dominated by index fund and speculative buying at the moment, with fundamentals taking a back seat, he added. Total futures market volume fell by 9,882 to 11,958 lots.


Source: Reuters
You can read the full article here: https://thrakika.gr/en/post/reuters-cotton-futures-dip-08-21