REUTERS: Cotton scales two-year peak

REUTERS: Cotton scales two-year peak

NEW YORK: ICE cotton futures jumped on Monday to their highest level in two years, supported by a weaker US dollar and a rally in the grains market, reaching just below the 80-cent level closely watched by analysts.

The cotton contract for March was up 0.69 cent, or 0.9%, at 78.81 cents per lb by 12:41 p.m. EST (1741 GMT)

The contract's session high of 79.90 cents was its highest since Dec. 2018.

"We are seeing quite a nice rally here. Some of the grains have been performing pretty well lately that could be transferring a bit to cotton," said Bailey Thomen, cotton risk management associate with StoneX Group.

"With the new year, we're seeing the stock markets performing pretty strong and then at the same time the US dollar is lower. However, prices found some resistance at 80 cents. All in all, the trend to the upside is still in place."

Chicago corn and soybean futures extended a rally to fresh 6-1/2 year highs as dry crop weather and disruption to exports in South America continued to unsettle investors at a time of brisk Chinese demand. Wheat also rose to reach a new six-year peak.

The dollar index slid to a 2-1/2 year low against its rivals. A weaker greenback makes cotton less expensive for buyers of the natural fibre in other currencies.

Meanwhile, Wall Street's main indexes pulled back from record highs on nerves over the outcome of runoff elections in Georgia this week.

Total futures market volume rose by 14,008 to 27,839 lots.

Certificated cotton stocks deliverable as of Dec. 30 totalled 70,847 480-lb bales, down from 74,686 in the previous session.


Source: Reuters
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