REUTERS: Cotton hits over one-month low on strong dollar, lower oil

REUTERS: Cotton hits over one-month low on strong dollar, lower oil

July 22 (Reuters) -ICE cotton futures fell to a more than one-month low on Monday, weighed down by a stronger dollar, falling oil prices, coupled with concerns over demand from China.

* Cotton contracts for December CTZ4 fell 0.51 cent, or 0.72%, to 70.19 cents per lb at 11:09 a.m. EDT(1509 GMT), having marked its lowest level since June 17, earlier in the session.

* "Demand is still an issue. Export sales report last week wasn't anything really too terribly strong, and we're still worried about what China will do, even though they've been taking a little bit here," said Jack Scoville, vice president at Chicago-based Price Futures Group.

* "The crops looking pretty good out there and that's probably the biggest thing going on. Condition ratings happen deteriorating, but should be stable maybe a little better here this week," said Scoville.

* Last week, the U.S. Department of Agriculture's weekly report showed sales export sales of 113,100 running bales (RB) on Thursday, were down 30% from the previous week and 33% from the prior 4-week average. EXP/COT

* The report also showed net sales of Upland cotton totaling 27,200 RB for 2023/2024, a marketing-year low, were down 50% from the previous week.

* The dollar .DXY rose for a third straight session, making cotton more expensive for overseas buyers.USD/

* Weighing on the natural fiber, oil prices fell on Monday after Joe Biden announced he would not seek a second term as U.S. president, while investors considered the possibility of U.S. interest rate cuts, potentially as soon as September. O/R

* Lower oil prices make cotton-substitute polyester less expensive.

* Cotton speculators trimmed their net short position by 631 contracts to 44,491 in the week to July 16. CFTC/

Reporting by Anmol Choubey in Bengaluru; Editing by Shailesh Kuber


Source: Reuters
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