Reuters: Cotton gains on strong sales data, Sino-US trade optimism
Reuters: Cotton gains on strong sales data, Sino-US trade optimism

Reuters: Cotton gains on strong sales data, Sino-US trade optimism

A- A+

ICE cotton futures rose 1% on Friday, helped by a robust export sales report from the US Department of Agriculture (USDA) and renewed hopes that the United States and China will reach a trade deal.

Cotton contracts for December gained 0.71 cent, or 1.1%, to 64.98 cents per lb by 11:30 a.m. EST (1630 GMT), trading within a range of 64.24 to 64.99 cents per lb.

“The market has absorbed a lot of bullish news today, Larry Kudlow's comments on US-China trade was positive, and we had a huge sales report," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.

The USDA in its weekly export-sales report showed net sales of 345,100 running bales (RB) for 2019/20, a marketing year high, and were up noticeably from the previous week and from the prior four-week average, for the period ended Nov. 7. The report showed an increase in exports to China, which was very encouraging, analysts said.

On the trade front, White House economic adviser Larry Kudlow said the world's two largest economies were getting close to a trade agreement, citing what he called very constructive talks with Beijing.

Adding to the upbeat mood, Commerce Secretary Wilbur Ross said there would be a call between US and Chinese officials later on Friday.

However, “there is not a lot of excitement. I think the market needs a lower dollar in order to break out the upside," Varner said.

The dollar index fell 0.2% to a one-week low against a basket of major currencies.

A weaker greenback makes commodities priced in dollars, such as cotton, less expensive for holders of other currencies.

Total futures market volume fell by 17,635 to 23,752 lots. Data showed total open interest fell 642 to 231,124 contracts in the previous session.

Certificated cotton stocks deliverable as of Nov. 14 totaled 57,548 480-lb bales, up from 54,462 in the previous session.


Copyright Reuters, 2019


Source: Reuters

Tags

newsletter

Subscribe to our daily newsletter