NEW YORK: ICE cotton futures fell to near a two-week low on Thursday after a sell-off in equities soured market sentiment and stoked concerns about demand for the natural fiber. Cotton contracts for December settled down 0.68 cent, or 1.1%, at 64.28 cents per lb, having earlier fallen to their lowest since Aug. 21 at 64.13 cents per lb.
On Wednesday, prices settled lower after investors booked profits following gains in the previous session.
"It is a little bit of a follow-through from yesterday, and we are seeing a little bit of weakness coming from the equities market as well," said Bailey Thomen, cotton risk management associate with StoneX Group.
"The demand situation is not great, the export sales report showed decent sales and shipments but nothing extraordinary," Thomen said, adding that demand from China had already been factored in.
The US Department of Agriculture's (USDA) weekly export sales report showed exports of 273,900 running bales (RB) in the week to Aug. 27, out of which 132,200 RB were shipped to China and net sales of 131,500 RB for 2020/2021.
The cotton market has grappled with demand concerns, and it has fallen 8.6% so far this year due to reduced demand for apparel and sluggish economic activity due to the pandemic.
Total futures market volume rose by 3,561 to 27,403 lots. Data showed total open interest gained 471 to 210,049 contracts in the previous session.
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