REUTERS: Cotton futures slip

REUTERS: Cotton futures slip

NEW YORK: ICE cotton futures retreated on Wednesday as weakness in broader equity and commodity markets such as crude oil and grains along with a stronger dollar seeped into the natural fibre.

Cotton contracts for July fell 1.38 cent, or 1.6% to 82.63 cents per lb by 12:51 p.m. EDT (1651 GMT). It traded within a range of 82.16 and 84.26 cents a lb.

“It’s (cotton prices) testing our long term trendline which is resting around 83 cents, (but) there’s just a lot of outside pressure (from broader markets) that’s pushing cotton down a bit,” said Bailey Thomen, cotton risk management associate with StoneX Group.

Worries over inflation and a steep fall in cryptocurrencies weighed on risk sentiment and boosted the dollar, in turn making greenback-denominated U.S cotton more expensive for buyers holding other currencies.

Market participants were also monitoring weather conditions in the top-cotton producing West Texas region, where recent showers have increased the possibility for an improving cotton crop.

“The (cotton) market is pretty comfortable in the mid 80 cents area and it would make sense to see it continue between this 80 to 90 cents area” in the near-term, Thomen added.

Traders now await the US Department of Agriculture’s weekly export sales report due on Thursday.

Total futures market volume fell by 4,231 to 22,123 lots. Data showed total open interest gained 250 to 223,538 contracts in the previous session.

Certificated cotton stocks deliverable as of May 18 totalled 112,318 480-lb bales, up from 105,098 in the previous session.


Source: Reuters
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