NEW YORK: ICE cotton futures rose 2.5% to a four-week high in thin trade on Monday, tracking upbeat sentiment in wider financial and oil markets, as well as a strong demand outlook for the natural fiber.
The cotton contract for March was up 2.75 cents, or 2.5%, at 111.87 cents per lb by 11:17 a.m. ET (1617 GMT), its highest level since Nov. 29. “The stock markets are up and crude oil is higher as well, which are impacting prices of cotton somewhat,” said Jack Scoville, vice president at Chicago-based Price Futures Group.
“There’s a lot of feeling out there that US economy is actually tagging along pretty well and demand for cotton is probably going to be higher. Export demand is also expected to remain strong.”
The S&P 500 hit a record high as a strong retail sales report underscored the strength of the economy.
US retail sales rose 8.5% during this year’s holiday shopping season from Nov. 1 to Dec. 24, powered by soaring ecommerce sales, a report by Mastercard Inc said on Sunday.
Oil prices rose more than $1 as Omicron concern eases. Higher oil prices make polyester, a substitute for cotton, more expensive.
Last week, the US Department of Agriculture’s weekly export sales report showed net sales of 243,900 running bales for 2021/2022, with China being the top buyer. Total futures market volume rose by 130 to 9,268 lots. Data showed total open interest fell 38 to 233,433 contracts in the previous session.
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