NEW YORK: Cotton futures fell on Thursday to a more than two-week low on speculator selling toward the end of the month and a mixed export sales report by the US Department of Agriculture (USDA).
The cotton contract for March fell 0.49 cent, or 0.6%, to 80.35 cents per lb by 1:01 p.m. EST (1801 GMT), having earlier touched its lowest level since Jan. 11.
“We are approaching the end of the month and are seeing some profit taking from the speculators. Export numbers were good but not great ... Shipments are more important than sales as once cotton is shipped it never comes back,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
In its weekly export sales report, the USDA showed that net sales of 322,700 running bales (RB) for 2020/2021 were up 10% from the previous week, while exports of 275,300 RB were down 15%.
Limiting some downside in the cotton prices, the dollar was down 0.2% against key rivals.
Investors were also paying close attention to the Biden administration’s $1.9 trillion stimulus bill, which was facing opposition from Republicans and some Democrats over the size of the package.
The US Senate and House of Representatives will begin moving forward next week on President Joe Biden’s plan to deliver a fresh infusion of relief to Americans and businesses reeling from the pandemic, top Democrats said.
“All markets have priced in to some degree that they will pass a massive stimulus bill but markets are just beginning to realize that it might not be as large,” Brown added.
Total futures market volume rose by 14 to 33,765 lots. Certificated cotton stocks deliverable as of Jan. 27 totalled 78,197 480-lb bales, up from 77,059 in the previous session.