NEW YORK: ICE cotton futures gained on Tuesday as a dry spell in the biggest cotton growing US state, Texas, provided a lift to the natural fiber market, hit by coronavirus-led reduction in demand.
Cotton contracts for December rose 0.13 cent, or 0.21 %, at 63.27 cents per lb as of 12:48 p.m. ET (1648 GMT). Prices on Monday rose to their highest level in 4-months at 63.70. "We are looking for stable prices for the very short-term. As long as the weather stays hot and dry in west Texas, we have a little bit more impetus to go higher," said Jack Scoville, vice president at Chicago-based Price Futures Group.
The US Department of Agriculture's weekly crop progress report on Monday showed 43% planted US cotton was in good/excellent condition, little changed from last week.
Meanwhile, Covid-19 infections are on the rise in 39 states, according to a Reuters analysis of cases over the past two weeks, with the country as a whole averaging some 50,000 new cases nearly every 24 hours in recent days.
"Even though demand is a little better than it was at the beginning of the year, we are still worried about the coronavirus and the associated loss in demand for clothing," Scoville said. Cotton prices have slumped 11% so far this year as the global pandemic destroyed demand for apparels, weighing on the natural fiber.
Total futures market volume fell by 5,641 to 13,704 lots. Data showed total open interest gained 300 to 167,727 contracts in the previous session.
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