NEW YORK: ICE cotton futures rose to an one-week peak on Tuesday, as data showed a decline in the natural fibre's crop condition and on optimism over a rebound in demand as economies recover from the pandemic.
Cotton contracts for December rose 0.19 cent, or 0.3%, at 65.35 cents per lb by 2:15 p.m. EDT (1815 GMT). Prices had earlier risen to their highest since August 25 at 66.44 cents per lb.
Cotton is being supported by a slight deterioration in the crop progress, some crop loss in Louisiana from Hurricane Laura and technical buying from speculators, said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
The US Department of Agriculture's (USDA) weekly crop progress report on Monday showed 44% of the crop was in good/excellent condition, down from last week's 46% and last year's 48%.
Hurricane Laura made landfall early on Thursday as a Category 4 storm packing winds of 150 mph (240 kph) in the small town of Cameron, Louisiana, the National Hurricane Center (NHC) said, but largely missed many fields of unharvested cotton in the area.
Also supporting the market, equities rose after better-than-expected US manufacturing sector data fuelled optimZism about an economic recovery.
"At this time, it seems the greatest bullish potential (for cotton) is tied to weather events (e.g. hurricanes) and monetary policy," Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
Prices earlier rose to 66.44 cents per lb, their highest since Aug. 25, when cotton had scaled a near six-month peak of 66.45 cents per lb. The rise was fuelled by concerns of crop damage from the tropical storms.
The natural fibre has suffered due to the coronavirus pandemic, which has upended economies and weakened demand this year.
Total futures market volume rose by 9,700 to 28,504 lots.-Reuters
Source: Reuters