NEW YORK: Cotton prices rose on Monday on a softer dollar, with an upbeat sentiment in wider financial markets also rubbing off on the natural fibre. The cotton contract for March was up 0.57 cent, or 0.8%, at 72.14 cents per lb by 12:08 p.m. EST (1708 GMT). It traded within a range of 71.35 and 72.38 cents per lb.
"Stock market is up, there is risk-on mentality and with the dollar lower, traders are more likely to buy commodities," said Rogers Varner, president of Varner Brokerage in Cleveland. However, "not much is going on and we can expect a quiet week going into Thursday in anticipation of supply and demand report," he added.
The dollar index fell 0.1% and was hovering near a more than 2-1/2-year low against its rivals on expectations of more US coronavirus relief aid. A weaker greenback makes cotton less expensive for buyers of the natural fibre in other currencies. The Nasdaq index extended its rally to a record high on Monday as investors piled into big technology stocks.
The market is now awaiting the US Department of Agriculture's (USDA) weekly export sales report and its monthly World Agriculture Supply and Demand Estimates (WASDE) report on Thursday. Meanwhile, speculators cut their net long position in cotton by 1,738 contracts to 52,873 in week to Dec. 1, data from the US Commodity Futures Trading Commission (CFTC) showed on Friday.
Total futures market volume fell by 9,480 to 12,612 lots. Certificated cotton stocks deliverable as of Dec. 3 totalled 101,220 480-lb bales, down from 113,325 in the previous session.