REUTERS: Cotton prices drop to over 6-week low on slowdown worries, dollar strength
REUTERS: Cotton prices drop to over 6-week low on slowdown worries, dollar strength

REUTERS: Cotton prices drop to over 6-week low on slowdown worries, dollar strength

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Bharat Govind Gautam  

Sept 19 (Reuters) ICE cotton futures on Monday fell more than 3% for a second consecutive session to hit their lowest level since early August on persistent worries over a global slowdown and a stronger dollar.

* Cotton contracts for December fell 3.71 cents, or 3.7%, to 95.58 cents per lb by 10:54 a.m. EDT, after earlier dropping to their lowest since Aug. 5 at 94.35 cents per lb.

* "Overall worries about the U.S. and world economies ... along with the dollar being strong again," are driving prices lower, said Jack Scoville, vice president at Chicago-based Price Futures Group.

* The dollar held firm near two-decade highs against other major currencies on Monday, making U.S. cotton more expensive for buyers holding other currencies.

* Just months ago, investors worried the U.S. Federal Reserve was not fighting inflation aggressively enough. Several jumbo rate hikes later, some now fear the Fed will plunge the economy into recession by tightening monetary policy too quickly.

* Chicago wheat also fell on Monday as the strong dollar threatened to hamper U.S. exports while expected increases in interest rates raised the prospect of a global recession cutting demand.

* "We do have a small (cotton) crop here in the U.S., a little bigger than we thought, but it's still a smaller crop," so that could provide some support, along with investors getting into the market at these cheap levels, Scoville added.

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Vinay Dwivedi)


Source: nasdaq.com

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