NEW YORK: ICE cotton futures rose 1% on Tuesday on concerns over crop damage due to Hurricane Nicholas, with a weaker dollar offering further support to the natural fiber.
Cotton contracts for December rose 0.96 cent, or 1%, to 93.77 cents per lb, at 12:45 p.m. ET (1645 GMT).
“Crops in the Delta and southeast are certainly at risk of some very heavy rains due to Nicholas. We have a chance of some damage on the crop,” said Jack Scoville, vice president at Chicago-based Price Futures Group.
“The weaker dollar is also having a beneficial effect. However, key resistance is going to be up around 94 to 95 cents and if we can get through there then the markets really taking off to the upside.”
Heavy rains lashed Texas and Louisiana as Hurricane Nicholas weakened into a tropical storm, bringing the threat of widespread floods and power outages as it swept down the US Gulf Coast.
The dollar index fell against its rivals, making cotton less expensive for buyers holding other currencies.
Meanwhile, the US Department of Agriculture’s weekly crop progress report on Monday showed 64% of the cotton crop was in a good-to-excellent condition in the week ending Sept. 12, up from 61% in the prior week.
Total futures market volume fell by 7,361 to 11,951 lots. Data showed total open interest fell 1,559 to 271,448 contracts in the previous session. Certificated cotton stocks deliverable as of Sept. 10 totaled 64,455 480-lb bales, unchanged from 64,455 in the previous session.
Source: Reuters