REUTERS: Cotton hits six-month low on China demand concerns
REUTERS: Cotton hits six-month low on China demand concerns

REUTERS: Cotton hits six-month low on China demand concerns

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ICE cotton futures slipped over 1% to a more than six-month low on Tuesday, pressured by concerns about demand from top consumer China as the harvest season for the natural fiber progressed.

* Cotton contracts for December (CTc1) fell 1.25 cents, or 1.6%, to 76.75 cents per lb at 1:13 p.m. ET (1813 GMT), after hitting its lowest since April 26 earlier in the session.

* "China's been buying most of its cotton out of Brazil ... and we're harvesting a crop right now, so there seems to be cotton aplenty," said Keith Brown, principal at cotton broker Keith Brown and Co in Georgia.

* U.S. cotton prices are unlikely to gain much traction this year despite lesser output as trade tensions push key buyer China to rivals Brazil and Australia, analysts said.

* The U.S. Department of Agriculture's weekly crop progress report released on Monday showed 57% of the cotton crop had been harvested in the week ended Nov. 5, compared with 49% in the prior week.

* The dollar gained 0.4%, making cotton more expensive for overseas buyers, while oil prices fell, making polyester, a cotton substitute, less expensive.

* Market focus turns to the World Agricultural Supply and Demand Estimates (WASDE) report due on Thursday.

* Brown said he expects the report to post a smaller cut to the U.S. crop, with some chance of lower production forecasts for India and China.

* U.S. wheat futures fell on Tuesday as the markets reacted to better-than-expected crop conditions, while soybean futures climbed to a two-month high.

Source: Reuters

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