ICE cotton futures fell on Monday as the dollar held near two-month highs, while US President Donald Trump’s comment on China delaying a trade deal further added demand worries for the natural fiber even as markets await trade talks this week.
* The most-active cotton contract on ICE Futures US, the second-month December contract, settled down 0.33 cent, or 0.5%, at 64.21 cents per lb.
* It traded within a range of 63.26 and 64.45 cents a lb.
* “We have been seeing the open interest go down. There is a lack of buying interest … Higher dollar could be weighing on cotton today,” said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group.
* The dollar index held near a two-month high ahead of the first US interest rate cut since the financial crisis. A stronger greenback makes commodities priced in dollars, such as cotton, more expensive for holders of other currencies.
* Cotton prices have slipped about 13% so far this year due to the drawn-out tariff war between the natural fiber’s top consumer China and one of the top producers – the United States.
* Trump on Friday offered a pessimistic view on reaching a trade deal with China, saying Beijing may not sign one before the November 2020 election in hopes that a Democrat who will be easier to deal with, will win.
* Meanwhile, the US government will pay American farmers hurt by the trade war with China between $15 and $150 per acre in an aid package totaling $16 billion, officials said on Thursday, with farmers in the South poised to see higher rates than in the Midwest.
* “We really need some fundamental news, perhaps with the Aug. 12 (USDA’s) WASDE report coming in, that could cause the speculators to want to take on short positions which would mean the market would move somewhat higher,” Rose said.
* Total futures market volume rose by 1,386 to 15,528 lots. Data showed total open interest fell 839 to 195,749 contracts in the previous session.
* Certificated cotton stocks deliverable as of July 26 totaled 30,522 480-lb bales, unchanged from 30,522 in the previous session.