NEW YORK: Cotton prices rose more than 1% to an 1-1/2-year high on Monday as the rollout of a Covid-19 vaccine boosted the demand outlook for the natural fibre, with the weaker dollar also contributing to the upbeat mood.
The cotton contract for March was up 0.79 cent, or 1.1%, at 74.87 cents per lb at 12:17 p.m. EST (1717 GMT), after hitting its highest level since May 2019 at 75.20 cents earlier in the session.
"Over the weekend, the Covid-19 vaccine was shipped to hospitals and places across the country, so that sort of lends a bit of optimism," said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
Also helping cotton prices, the US dollar is at a multi-year low and the US Department of Agriculture lowered production and ending stock estimates last week, he added.
Shipments of the Pfizer-BioNTech vaccine fanned out from FedEx and UPS hubs in Tennessee and Kentucky on Sunday to distribution points across the United States, with injections set to begin on Monday. The rollout of a Covid-19 vaccine lifted hopes for a quick economic recovery and prompted a shift towards riskier assets.
The dollar index fell to its lowest level since April 2018 against its rivals, making the natural fibre less expensive for holders of other currencies.
Meanwhile, speculators cut their net long position in cotton by 2,937 contracts to 49,937 in the week to Dec. 8, data from the US Commodity Futures Trading Commission (CFTC) showed on Friday.
Total futures market volume fell by 6,165 to 16,053 lots.
Certificated cotton stocks deliverable as of Dec. 11 totalled 86,125 480-lb bales, down from 86,544 in the previous session.