Forexpros - Cotton futures declined on Wednesday, as improving U.S. cotton crop conditions and concerns over a slowdown in demand from top consumer China continued to weigh on prices.
On the ICE Futures U.S. Exchange, cotton futures for March delivery traded at USD0.9322 a pound during European afternoon trade, dropping 0.63%.
It earlier fell by as much as 0.98% to trade at a daily low of USD0.9289 a pound.
The U.S. Department of Agriculture said in its final crop progress report for the season published last week, that nearly 92% of the U.S. cotton crop was harvested as of November 27, up from 84% the week before and above the five-year average of 82% for this time of year.
In Texas, the largest cotton-growing state in the U.S., approximately 93% of the cotton crop was harvested, compared to 82% a week earlier, while 86% of crops in Alabama, the third-largest grower, were harvested, up from 80% a week before.
Cotton prices came under further pressure after Chinese industry group CNCotton said that Chinese cotton importers were refraining from booking shipments before April because of uncertainty over the timing and volume of sliding-tariff quotas for 2012.
The U.S. is the worldΆs third largest cotton producer and the biggest exporter of the fiber, while China is the worldΆs largest cotton consumer.
Traders have been focusing on demand issues in recent sessions, as the U.S. cotton harvest was in its finishing stages. The next USDA crop progress report will be released in April, when U.S. farmers start planting agricultural crops for the 2012-13 season.
Meanwhile, agricultural commodity traders continued to monitor developments out of the euro zone amid growing uncertainty ahead of this weekΆs critical European Union summit.
The Wall Street Journal reported earlier that an unnamed senior German official expressed pessimism on the prospect of success at the two-day EU summit.
European leaders are due to discuss changes to EU treaties which would allow for greater fiscal integration and stricter enforcement of budgetary discipline in the single currency bloc.
Focus on the summit has intensified since ratings agency Standard & Poor's placed 15 euro zone nations, including AAA-rated Germany and France, on review for credit downgrades due to the regionΆs deepening financial crisis.
Elsewhere, on the ICE Futures Exchange, coffee futures for March delivery added 0.15% to trade at USD 2.3568 a pound, while sugar futures for March delivery declined 0.65% to trade at USD0.2409 a pound.
