NEW YORK: ICE cotton futures on Tuesday pushed through to a fresh peak as the market bought in to rising demand recovery expectations, with help from strength in some key grains.
Cotton contracts for December rose 1.14 cents, or 1.3%, to 92.04 cents per lb, by 11:21 a.m. EDT (1521 GMT), earlier going as high as 92.43 cents per lb.
This is the first time the December contract has broken above 92 cents per lb, a level that provided some resistance over the past week, with analysts crediting robust demand for recent moves past the 90-cent mark.
"Cotton is a commodity speculators like to own and they're pushing the long side due to an overall inflationary outlook and anticipation of a huge consumer binge to buy textiles as the world economy reopens," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
US soybeans firmed on hopes of more Chinese demand while wheat also rose.
Analysts and traders have said that while the weather in key cotton growing regions like West Texas so far this season has been supportive to the crop, there are some worries that dry weather at the wrong time could derail the crop in a key month for its development.
"The weather has been good, West Texas could use rain in the back half of August. The Delta probably would like rain at the same time, but the weather up until early August has been really good," Varner said.
The US Department of Agriculture weekly crop progress report released on Monday showed 60% of the US crop was in good-to-excellent condition, unchanged from a week ago, and up from 42% a year ago.
Comments
Comments are closed for this article.