Cotton Ends Week Higher

Cotton Ends Week Higher

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Cotton prices eked out of their weeklong trading range Friday as ideas of lower production beat out signs of weak demand.

Cotton for December delivery rose 1.6% to end at 63.32 cents a pound on the ICE Futures U.S. exchange, ending the week up 0.9%. The most active contract had traded between 62 and 63 cents for a week as speculators lose their appetite for the cotton market, unsure of its direction.

The trade has been debating the latest statistics by the U.S. Department of Agriculture, which is estimating that mills around the world will use 112.3 million bales of cotton this year, versus 110.5 million bales last year, and that ending stocks of cotton will be lower for the first time since 2009. Each bale weighs 480 pounds.

"The reason the market has not reacted to these somewhat friendly statistics, apart from probably not believing them, is that uncertainty about the future has forced mills into a hand-to-mouth buying pattern. Inventories are being reduced and mills are only buying the absolutely necessary at the moment," Plexus Cotton said in a note.

Meanwhile, in India, which is expected to outpace China this year as the world's largest cotton producer, the USDA's attache estimate of the crop is coming in shorter than USDA estimates, Louis Rose, founder of research advisory group the Rose Report in Beeville, Texas, said in a note.

Erik Tatje, market strategist II at RJO Futures in Chicago said the market should be well supported above 60 cents as concerns about wet weather harming crops in the southern U.S. should put a floor under prices in the near term.

In other markets, raw sugar for March fell 0.3% to 14.52 cents a pound, cocoa for December rose 1.4% to close at $ 3,259 a ton, arabica coffee for December ended higher, up 0.5% at $1.2095 a pound, and frozen concentrated orange juice futures for January delivery rose 0.9% to end at $1.3375 a pound.

Write to Julie Wernau at julie.wernau@wsj.com

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