NEW YORK: ICE cotton futures rose on Thursday, helped by mill fixations and as investors covered short positions ahead of a federal monthly supply-demand report. Cotton contracts for December settled up 0.61 cent, or 1%, at 64.81 cents per lb.
"There is fresh demand that has hit the market over the last couple of days and shorts are being covered by merchants because of that," said Louis Barbera, partner and analyst at VLM Commodities LTD. The market is now awaiting the US Department of Agriculture's (USDA) weekly export sales report and its monthly World Agriculture Supply and Demand Estimates (WASDE) report on Friday.
A slightly lower crop production and demand is expected from the WASDE report, while another round of buying is expected from China, Vietnam and Turkey in the export sales report, Barbera added. Last month, cotton prices had dropped 2% after the monthly supply-demand report projected higher production and inventories of both the US and global crop.
Investors were also keeping a close eye on US-China ties after US Customs and Border Protection officials prepared orders to block imports of cotton products from China's western region of Xinjiang over accusations of forced labour. The United States is the biggest exporter of the natural fibre, while China is the biggest consumer.
Demand for cotton and apparel has been battered as governments across the world imposed restrictions to curb the spread of the coronavirus, sending prices of the natural fibre about 8% lower so far this year. Total futures market volume fell by 5,713 to 18,298 lots. Data showed total open interest fell 522 to 216,692 contracts in the previous session.
Comments
Comments are closed for this article.