June 25 (Reuters) - ICE cotton futures rose on Thursday as an upbeat export sales report reassured traders of robust demand for the natural fiber, while dry weather in Texas, the largest cotton-producing state, provided further support.
* Cotton contracts for December rose 0.62 cents, or 1.05%, to 59.83 cents per lb by 02:18 p.m. ET (1818 GMT). It traded within a range of 58.80 to 59.93 cents a lb.
* Lack of rainfall in West Texas and accelerated sales of old crop are giving some stability to the market, said Louis Barbera, partner and analyst at VLM Commodities LTD.
* “The fact that we’re still selling cotton tells us that the market strength is warranted and that the December (contract) has limited downside.”
* The U.S. Department of Agriculture (USDA) showed net sales of 102,700 running bales (RB) for 2019/20 were up 5% from the previous week.
* Exports of 316,100 RB were down 9% from the previous week, but up 10% from the prior 4-week average for the week ending June 18.
* Prices of the natural fiber have dropped about 16% so far this year as the coronavirus outbreak hurt demand.
* “Even as the pandemic rages, export sales have not been that bad. 19/20 sales have reached 121% of the USDA’s forecast for the marketing year versus a 5-year average of 105%,” said John Payne, senior broker at Daniels Trading, in a note.
* Payne added that “unless there are heavy cancellations, we would expect the USDA to raise their forecast for the marketing year, which could tighten ending stocks”.
* Total futures market volume fell by 1,313 to 11,440 lots. Data showed total open interest fell 328 to 158,981 contracts in the previous session.
* Certificated cotton stocks CERT-COT-STX deliverable as of June 24 totaled 39,261 480-lb bales, up from 36,374 in the previous session. (Reporting by Asha Sistla and Sumita Layek in Bengaluru; Editing by Jan Harvey)