NEW YORK: ICE cotton futures eased on Thursday ahead of a monthly supply and demand report, with some traders expecting the United States Department of Agriculture (USDA) to raise its estimate for US supply in the report.
Cotton contracts for December fell 0.45 cent, or 0.5, to 93.63 cents per lb by 1:00 p.m. EDT. It traded within a range of 93.63 and 94.67 cents a lb.
The USDA’s keenly awaited World Agriculture Supply and Demand Estimate (WASDE) report is due on Friday.
Peter Egli, director of risk management at British merchant Plexus Cotton, said the USDA could raise its estimate for US output as current conditions pointed to a good crop.
“Supplies are tight now and shipments are being delayed in a lot of places, but supply is going to start to stream in about one to two months and then we will see how quickly we can satisfy demand,” Egli said.
The USDA’s weekly crop progress report on Tuesday showed 61% of the cotton crop was in a good-to-excellent condition in the week ended Sept. 5. That was down from 70% in the prior week, but still well above the 44% for the same period a year ago.
Market participants were also looking ahead to the USDA’s weekly export sales report on Friday. The report was delayed due to the Labor Day holiday.
“The global economy is weakening and we have to see what that means for demand going forward,” Egli said. He added that Tropical Depression Mindy - which could bring rain to South Carolina and Georgia - was unlikely to have a major impact on supply.
Certificated cotton stocks deliverable as of Sept. 8 totaled 64,455 480-lb bales, down from 68,502 in the previous session.