REUTERS: Cotton holds steady; market awaits clarity on fresh US tariffs
REUTERS: Cotton holds steady; market awaits clarity on fresh US tariffs

REUTERS: Cotton holds steady; market awaits clarity on fresh US tariffs

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Cotton futures held steady on Wednesday, buoyed by a positive global supply and demand report from the US Department of Agriculture (USDA), while investors remained cautious ahead of a Dec. 15 deadline for fresh US tariffs on Chinese goods.

Cotton contracts for March rose 0.03 cent, or 0.05%, to 65.96 cents per lb by 1:50 p.m. EST (1850 GMT). It traded within a range of 65.34 to 66.19 cents a lb. “Yesterday's USDA report was very friendly, we saw reduction in stocks and production numbers … that's supportive. But we are not getting much follow-through here, I think we need a trade deal," said John Payne, senior broker at Daniels trading.

US President Donald Trump has only days to decide whether to impose tariffs on nearly $160 billion in Chinese goods, a move that would exacerbate the 17-month trade war. The White House's top economic and trade advisers are expected to meet in coming days with Trump over the decision, a source told Reuters.

“The recent wave of trade optimism has lifted cotton prices but bearish pressures on the commodity remain strong," OCBC Bank said in a research note.

“Supply in and out of China appears abundant and prices are unlikely to rally too strongly in a buyer's market."

The natural fiber has fallen more than 8% so far this year, mainly due to a prolonged trade dispute between cotton's top consumer, China, and one of the top producers, the United States. Offering some support to the market, the USDA on Tuesday lowered US and world production and stocks estimates for the end of the 2019/20 crop year in its latest monthly supply-demand report.

Total futures market volume fell by 9,304 to 14,424 lots. Data showed total open interest fell 37 to 194,863 contracts in the previous session.

Certificated cotton stocks deliverable as of Dec. 10 totaled 34,090 480-lb bales, down from 41,540 in the previous session.


Source: Reuters

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