Cotton marks biggest one-day loss in a month as investors liquidate

ICE cotton futures fell about 1.5 percent to snap a four-session rally on Tuesday, after touching a near three-week high earlier in the day, as investors liquidated their net long positions amid a firmer dollar. The March cotton contract on ICE Futures US touched the key 75 cent-per-lb level for the first time since January 5, but ended the day lower by 1.42 percent, the biggest one-day percentage fall since December 19.
"It looks like funds were offsetting their net long positions... Yesterday's increase without any other fundamentals changing probably gave them a good opportunity to sell off today," said Gabriel Crivorot, analyst at Societe Generale in New York.
The US dollar firmed against the yen and euro on Tuesday, after several days of losses in the wake of President Donald Trump's inaugural speech promising more trade protectionism, with the US economic outlook still seen better than that of Europe or Japan.
The March cotton contract on ICE Futures US settled down 1.06 cent, or 1.42 percent, at 73.57 cents per lb. It traded within a range of 72.53 and 75 cents a lb.
Total futures market volume rose by 9,603 to 47,886 lots. Data showed total open interest gained 4,924 to 265,374 contracts in the previous session.
The dollar index was up 0.20 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 0.26 percent.