REUTERS: Cotton futures slip

REUTERS: Cotton futures slip

NEW YORK: ICE cotton futures fell to a near two-week low on Thursday, hurt by a stronger dollar and as rising coronavirus cases re-ignited demand worries, even as US crop damage concerns due to Storm Zeta persisted.

The cotton contract for December fell 0.30 cent, or 0.4%, at 69.87 cents per lb by 1:07 p.m. EDT (1707 GMT). Prices earlier slipped to their lowest since Oct. 16 at 69.58 cents.

“The higher US dollar is a negative factor and even with the pretty decent export sales report, there’s some question about demand down the road, because of the return of the coronavirus,” said Jack Scoville, vice president at Chicago-based Price Futures Group.

The dollar climbed to a one-month peak, making cotton expensive for holders of other currencies.

The White House coronavirus task force warned of a persistent and broad spread of Covid-19 in the western half of the United States, while France and Germany ordered their countries back into lockdown amid a massive second wave of infections.

The US Department of Agriculture’s weekly export sales report showed net sales of 288,700 running bales for 2020/21 were up 27% from the previous week, while exports rose 18% for the period ended Oct. 22.

Cotton prices had fallen below 50 cents in late March after the pandemic upended demand, but have since risen over 40% as adverse weather fuelled concerns of lower output and quality.

Fears over damage to the crop due to Storm Zeta, which brought heavy rainfall in top growing states was providing slight support to the cotton market, Scoville said.

Total futures market volume fell by 17,690 to 27,640 lots. Data showed total open interest gained 1,349 to 249,452 contracts in the previous session.

Certificated cotton stocks deliverable as of Oct. 28 totalled 44,471 480-lb bales, up from 40,728 in the previous session.—Reuters


Source: Reuters
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