NEW YORK: ICE cotton futures were helped up by strength in the stock market and grains on Monday, their first session in a critical month for the crop.
Cotton contracts for December rose 0.8 cent, or 0.9%, to 90.19 cents per lb, by 11:32 a.m. EDT (1532 GMT). They traded within a range of 89.01 and 90.2 cents a lb. * “August is the crucial development month, so the market may be dialing in on a little bit of fear on the first day,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
A higher Chicago grains market, along with a stronger stock market and weaker US dollar were also combining to prop up prices, Brown said.
Chicago wheat rose on expectations of lower world harvests, with corn and soybeans also climbing. * US stocks rose in early trading Monday morning on optimism over government infrastructure spending and strong corporate earnings, even as oil prices fell on broader macroeconomic fear and the spread of the Delta variant of the coronavirus. * The dollar eased, making it expensive for buyers using other currencies, and hence lifting the demand for cotton. Market participants await a federal weekly crop progress report later on Monday.
“The crucial time for cotton development is mid-August. For a good crop we need temperatures to cool slightly, and some scattered showers, maybe a half inch of rain every week, but I just don’t think that’s going to materialize in West Texas, Brown added.
Total futures market volume fell by 8,939 to 10,264 lots. Data showed total open interest fell 817 to 248,538 contracts in the previous session.
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