REUTERS: Cotton rises over 1pc as dollar weakens

REUTERS: Cotton rises over 1pc as dollar weakens

NEW YORK: ICE cotton futures rose as much as 1.4% on Monday, underpinned by a weaker dollar, with investors expecting a further deterioration in crop quality in a weekly US government report due later in the day.

Cotton contracts for December settled up 0.43 cent, or 0.68 %, at 63.28 cents per lb.

"The fact that the crop conditions for cotton are going to go down a little bit more" lent support to prices, said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.

"You've got to look at last week's report, I don't understand how we can have record yield considering the condition of the crop," referring to the United States Department of Agriculture's monthly report released on Wednesday.

US cotton yield is projected at a record 938 pounds/acre, 14% higher than in 2019, the USDA said in its World Agriculture Supply and Demand Estimates (WASDE) report. The agency also raised its production estimate for the 2020 crop by 3% to 18.1 million bales.

Investors now eye the United States Department of Agriculture's weekly crop progress report due later on Monday.

Boosting prices further, the dollar index edged lower, making commodities priced in the greenback, like cotton, cheaper for holders of other currencies.

"The big determinant for the near-term direction of cotton will be where the dollar goes," said Rogers Varner, president of Varner Brokerage in Cleveland, adding that there was a little mill buying interest and low volumes.

Meanwhile, the United States and China have delayed a review of their Phase 1 trade deal initially slated for Saturday, sources familiar with the plans told Reuters.

The pandemic has battered demand for the fiber, while souring US China ties added to the woes, sending prices over 10% lower so far this year.

Total futures market volume fell by 1,120 to 11,552 lots. Data showed total open interest fell 68 to 193,013 contracts in the previous session.


Source: Reuters
You can read the full article here: https://thrakika.gr/en/post/reuters-cotton-rises-over-1pc-as-dollar-weakens