ICE cotton futures settled higher on Wednesday after slipping to a one-month low earlier in the session amid concerns over a trade dispute between the biggest exporter United States and top consumer China. The most active cotton contract on ICE Futures US, the third-month December contract, settled up 0.36 cent, or 0.43 percent, at 84.18 cents per lb. The contract traded within a range of 82.94, the lowest since May 21, and 85.65 cents a lb.
"I think the reason we were up today was the market was too oversold. And we don't have a legitimate tariff, only the fear of it. It was enough to break the market ... (but) there is plenty of time to work out differences," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.
"Very little has changed fundamentally with Texas still in trouble ... There are large areas in Texas where rain is not going to matter now. We are yet to receive USDA's acre numbers so we can't even figure an abandonment or the yield. There are some unknowns out there."
Cotton futures fell nearly 10 percent in the last three sessions as concerns about an escalating trade conflict between United States and China sparked a sell-off. Meanwhile, India's cotton shipments to China could grow five-fold to 5 million bales (850,000 tonnes) in the next crop year as exporters rack up orders amid a trade war that is forcing the world's top consumer to look for other sources of supply.
The US Department of Agriculture's weekly export sales report is due on Thursday. Total futures market volume remained unchanged at lots. Data showed total open interest remained at contracts in the previous session. Certificated cotton stocks deliverable as of June 19 totalled 84,976 480-lb bales, up from 82,314 in the previous session.
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