NEW YORK: ICE cotton futures rose more than 1% on Tuesday, with mills taking advantage of a steep fall in the previous session to buy back some of the natural fiber, while a weaker dollar offered further support.
The cotton contract for December rose 1.22 cents, or 1.4%, to 90.24 cents per lb by 01:00 p.m. ET (1700 GMT), after hitting its lowest since Aug. 3 in the previous session. “People that are looking to get back in the market are taking advantage of these lower prices that we haven’t seen in a month or two. It could be related to new speculators or also could be related to some mill fixations,” Bailey Thomen, cotton risk management associate at StoneX Group said.
“Also the US dollar has pulled back a little bit which is helping commodities. However, the cotton market is still susceptible to a further sell off from some of these outside market forces”
The dollar slipped 0.1% against its rivals after touching a near one-month peak on Monday, making cotton less expensive for buyers holding other currencies.
World stock markets stabilized after a sharp sell-off, as investors assessed the level of contagion stemming from distress of debt-saddled property group China Evergrande.
Total futures market volume fell by 35,805 to 17,827 lots. Data showed total open interest fell 8,727 to 263,976 contracts in the previous session.