NEW YORK: Cotton futures rose on Thursday as rising demand for corn and soybeans has increased expectations for lower cotton planting acres, while exports jumped to a marketing year high. The cotton contract for March rose 1.20 cent, or 1.4%, to 85.87 cents per lb by 1:45 p.m. EST (1845 GMT).
“With cand soyabean prices so high it is going to take away acres from cotton, which already has been in demand, and we’re anticipating to have smaller acres going forward,” said Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago. Also, “prices have rallied here in tandem with the grain,” Marcus said, adding, bullish exports data and rising equities have added further support to the market.
Chicago Board of Trade corn and soybean futures rose on Thursday, with end users stepping in to buy the market one day after prices posted sharp declines.
In its weekly export sale report, the US Department of Agriculture showed that exports of 433,600 running bales (RB)- a marketing-year high - were up 36% from the previous week, of which 143,200 RB were shipped to China.
The United States is one of the biggest producers of cotton while China is the largest consumer.
The report also showed that net sales of 275,400 RB for 2020/2021 were down 4% from the previous week.
Meanwhile, US stocks were higher and MSCI’s gauge of stocks across the globe was set for a ninth day of gains on Thursday as investors were optimistic about more fiscal stimulus from the United States.
Total futures market volume fell by 41,752 to 39,864 lots. Certificated cotton stocks deliverable as of Feb. 10 totalled 96,810 480-lb bales, up from 93,667 in the previous session.