ICE cotton futures extended losses for the second straight session on Tuesday, falling nearly 1%, as investors continued liquidating on expectations of excess supply in the market.
Cotton contracts for March fell 0.57 cent, or 0.86% to 65.40 cents per lb by 01:10 p.m. EST (1810 GMT), trading within a range of 65.33 to 66.06 cents per lb. The natural fiber registered its biggest percentage fall for the month on Monday, sliding as much as 2%.
"The general idea is we are still in cotton harvest and there are no shortages right now and there is no bullish scenario going on here, so people are opting out," said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.
The weekly crop progress report from US Department of Agriculture (USDA) on Monday showed 68% of US cotton was harvested compared with 62% last week. Earlier this month, a USDA monthly supply-demand report showed lower US and world production and ending stocks estimates for the 2019/20 crop year.
On the trade front, US President Donald Trump said on Tuesday he would raise tariffs on imports of Chinese goods if no trade deal is reached with Beijing. "If the US and China could actually commit to a phase one trade deal, the Mar contract seems poised to break through the 70 cents level", Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
Total futures market volume fell by 15,241 to 23,273 lots. Data showed total open interest fell 637 to 226,762 contracts in the previous session. Certificated cotton stocks deliverable as of Nov. 19 totaled 65,199 480-lb bales, up from 57,548 in the previous session.
Comments
Comments are closed for this article.