REUTERS: Cotton rally cools as traders strap in for WASDE
REUTERS: Cotton rally cools as traders strap in for WASDE

REUTERS: Cotton rally cools as traders strap in for WASDE

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NEW YORK: ICE cotton futures on Wednesday let up from contract highs as investors positioned themselves a day ahead of a key federal monthly supply and demand report.

Cotton contracts for December fell 1.01 cents, or 1.1%, to 91.31 cents per lb, by 12:17 p.m. EDT (1617 GMT), having earlier recorded a new contract high of 92.50.

Market participants now await the US Department of Agriculture’s World Agricultural Supply and Demand Estimates (WASDE) report, and weekly export sales data due on Thursday.

“People are trying to decide if this a supply or demand driven market, and we’re going to see more about that tomorrow,” hinging on WASDE as well as export sales data, said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia. * “They are also looking at Tropical Storm Fred to see what path it might take, and whether it could turn towards Georgia, which is unlikely, as producers don’t really want any more rain here in south Georgia.” July’s World Agricultural Supply and Demand Estimates (WASDE) report projected lower ending stocks, higher production and increased exports.

“We really need 90-cent cotton to attempt to make a little money or break even as input costs have gone up exponentially; if not, we’ll see a reduction in acres next year and, boom, December 2022 may go to $1.20,” Brown said. Total futures market volume fell by 13,263 to 13,244 lots. Data showed total open interest gained 3,816 to 260,961 contracts in the previous session.

Source: Reuters

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