REUTERS: Cotton pares gains after USDA projects higher US production
REUTERS: Cotton pares gains after USDA projects higher US production

REUTERS: Cotton pares gains after USDA projects higher US production

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Nov 9 (Reuters) -ICE cotton futures slightly pared gains on Thursday after the U.S. Department of Agriculture (USDA) projected higher U.S. output and ending stocks for the 2023/24 crop year in its monthly supply-demand report.

* Cotton contracts for December CTc1 rose 1.99 cent, or 2.66%, at 76.88 cents per lb at 1:34 p.m. ET (1834 GMT). The contract was up as much as 3.2% earlier in the session.

* Prices sold off after the USDA's November World Agricultural Supply and Demand Estimates (WASDE) report, as it showed higher world ending stocks and raised the U.S. production estimate, said Jim Nunn, owner of Tennessee-based cotton brokerage Nunn Cotton.

* The WASDE report raised U.S. production in 2023/24 by 273,000 bales to 13.1 million bales and saw global ending stocks up by 1.6 million bales, while also cutting the world's consumption estimate by 500,000 bales.

* "While we did see the Chinese import number was raised and that's positive, they didn't increase the Chinese consumption," Nunn added.

* China's projected imports were up by 500,000 bales, which were largely expected to be for the State Reserve, the report said.

* The USDA's weekly export sales report showed net sales of 395,200 running bales (RB) of cotton for 2023/2024, down 14% from the previous week, but up noticeably from the prior four-week average. EXP/COT

* "I expect the open interest in the December contract to start falling pretty quickly and maybe that'll give a little boost," Nunn said.

Reporting by Daksh Grover in Bengaluru; Editing by Shilpi Majumdar and Krishna Chandra Eluri


Source: Reuters

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