CHICAGO: ICE cotton futures fell to a one-week low on Friday and were on track for their third straight weekly decline, weighed down by a jump in the U.S. dollar.
The cotton contract for December fell 0.30 cent, or 0.3%, to 92.21 cents per lb by 11:43 a.m. ET (1543 GMT). The contract is down 1.3% so far this week. "The dollar is on the rise again. But the demand has been pretty good, issue is merchants don't have their hands on the crop yet, and cotton at 90 cents is a rich price," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi. "On the technical front, cotton prices have good support around 92 cents and we have strong resistance at 95 cents." The dollar rose to a near four-week high against its rivals, potentially limiting demand for the natural fiber by making it more expensive for buyers holding other currencies.
On Thursday, the U.S. Department of Agriculture's weekly export sales report showed exports of 237,500 running bales (RB) of cotton, up 53% from the previous week. Sentiment on the Wall Street remained subdued as U.S. stock indexes slipped with major technology firms weighing the most, while uncertainty over higher corporate taxes and an upcoming Federal Reserve meeting kept traders to the sidelines.
Total futures market volume fell by 8,392 to 11,842 lots. Data showed total open interest fell 724 to 272,662 contracts in the previous session.
Certificated cotton stocks deliverable as of Sept. 15 totalled 63,515 480-lb bales, down from 64,455 in the previous session.
Source: Reuters