NEW YORK: ICE cotton futures rose more than 1% on Wednesday as investors took stock of a steady Chinese demand for US agricultural goods, even as tensions grew after US President Donald Trump said he postponed a planned Aug. 15 meeting between the two nations.
Cotton contracts for December rose 0.63 cent, or 1.0%, at 63.56 cents per lb by 2:10 p.m. EDT (1810 GMT).
"The only thing supporting cotton is that the US trade agreement with China remains in place," said Ed Jernigan, chief executive of Jernigan Global, a cotton textile supply chain manager. As long as China is buying US grains on a daily basis, that suggests the trade agreement is in place and the large amounts of unshipped US cotton sold to China is on track to be shipped, Jernigan said.
Cotton prices have tumbled about 9.4% so far this year hurt by a decline in demand for cotton and apparel amid the virus outbreak, while concerns over US-China trade relations added to woes.
US is the top exporter of the natural fiber, while China the top consumer.
Total futures market volume fell by 3,034 to 11,690 lots. Data showed total open interest fell 323 to 192,683 contracts in the previous session.
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