REUTERS: Cotton gains as traders weigh tropical storm’s supply impact

REUTERS: Cotton gains as traders weigh tropical storm’s supply impact

NEW YORK: ICE cotton futures were close to their contract highs on Monday as traders assessed the impact on supply from Tropical Strom Fred that is predicted to bring rain to some key-cotton growing regions.

The cotton futures contract for December was steady at 94.35 cents per lb by 12:55 p.m. EDT, a whisker away from its contract high of 94.70 hit on Friday. Tropical Storm Fred is expected to make landfall in the Florida Panhandle on Monday, potentially bringing rain to parts of Alabama, Georgia and elsewhere in the Southeast and Mid-Atlantic over the next few days.

“The southeast and the Delta has already been inundated over the season with a lot of rain, so for the cotton crop it would not be beneficial to get rain now,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.

The US Department of Agriculture (USDA) last week lowered its US production estimate for the 2021/22 crop year by over half a million bales.

Market participants will now eye a weekly crop progress report from the USDA later on Monday.

Cotton also broadly overlooked a spike in COVID-19 cases, especially in top cotton buyer China where a key port was shut last week after a positive case was detected.

“While the closure could be a negative for cotton demand and the demand outlook is slightly muted than before, the fact that cotton prices are little changed suggests it wants to go a little higher and is just waiting for some positive peripheral news,” Brown added.

Analysts also noted that while political turmoil in Afghanistan weighed on market sentiment, it was unlikely to impact the natural fiber directly.

Data showed total open interest fell to 260,317 contracts in the previous session.


Source: Reuters
You can read the full article here: https://thrakika.gr/en/post/reuters-cotton-gains-as-traders-weigh-tropical-storm-s-supply-impact