REUTERS: Cotton futures slip
REUTERS: Cotton futures slip

REUTERS: Cotton futures slip

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NEW YORK: ICE cotton futures fell on Thursday despite a weaker dollar and encouraging export sales data, pressured by a demand outlook clouded by rising coronavirus cases amid concerns over the fallout of a US ban on imports from a Chinese producer. The cotton contract for March was down 0.35 cent, or 0.5%, at 71.25 cents per lb by 11:46 p.m. EST (1646 GMT).

"The market is finding support because there is a lot of export business going on," said Ed Jernigan, chief executive of Jernigan Global, a cotton textile supply chain manager, adding "also a weaker dollar is supporting prices."

"But on the other side, the market is worried about demand and second wave of the coronavirus outbreak has slowed the orders... So right now, no mill is willing to chase the market higher, so when it goes lower there is good off take," Jernigan added.

The US Department of Agriculture's weekly export sales report showed net sales of 277,900 running bales (RB) for 2020/21, were down 22% from the previous week but up 33% from the prior four-week average.

The dollar index fell 0.5% and was languishing at more than 2-1/2-year low against its rivals. The US ban on of all cotton imports with items made from cotton grown in Xinjiang could prove bearish if China retaliates, said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group.

The Trump administration expanded economic pressure on China's western region of Xinjiang, banning cotton imports from a powerful Chinese quasi-military organization that it says uses the forced labour of detained Uighur Muslims. Total futures market volume fell by 15,658 to 10,757 lots. Certificated cotton stocks deliverable as of Dec. 2 totalled 113,325 480-lb bales, up from 112,728 in the previous session.


Source: Reuters

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