REUTERS: Cotton rises on strong demand view; firm dollar caps gains
REUTERS: Cotton rises on strong demand view; firm dollar caps gains

REUTERS: Cotton rises on strong demand view; firm dollar caps gains

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NEW YORK: ICE cotton futures rose in thin trading on Monday, helped by strong demand prospects for the natural fiber, although a robust dollar capped further gains.

The cotton contract for March was up 0.63 cents, or 0.6%, at 113.23 cents per lb by 11:50 a.m. ET (1650 GMT).

“Cotton has good fundamentals. We had a good shipment number last week. A good sales number and China was the number one buyer for cotton. The trend of cotton is still up,” said Keith Brown, principal at Keith Brown and Co in Georgia.

“However, the dollar today being up 70 points is rather extreme, so that is causing a little consternation among traders. But overall, I think cotton fundamentals are fairly solid.”

The US dollar rose 0.6% against a basket of major currencies, tracking government bond yields as investors anticipate the Federal Reserve will stay on its path of interest rate hikes in 2022.

A stronger greenback makes cotton more expensive for other currency holders.

Last week, the US Department of Agriculture (USDA) weekly export sales report showed net sales of 192,200 running bales, with China being the top buyer.

Chicago soybean futures prices rose by about 1.5% on South American weather concerns, while world markets got 2022 off to an optimistic start, with US and European equity markets powering higher on Monday.

On the technical front, “the March contract should experience resistance near 115-116 cents and support near 100-102, 95 -96 and 90-92 cents over the near-to-medium-term,” Louis Rose of Tennessee-based Rose Commodity Group said in a note.

Total futures market volume fell by 3,760 to 10,346 lots. Data showed total open interest gained 318 to 239,896 contracts in the previous session.


Source: Reuters

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