NEW YORK: ICE cotton futures gained on Tuesday as investors stepped in to pick up bargains after the natural fibre hit a more than one-week low in the previous session, while a resilient dollar limited further advance.
Having posted losses in the last five sessions, cotton contracts for December rose 0.21 cent, or 0.3%, to 65.45 cents per lb, at 12:49 p.m. EDT (session.
It traded within a range of 65 and 65.95 cents a lb.
Cotton prices sold off from nearly 67 cents last week to around 64.7 cents in the previous session so, there is some bargain hunting in the market, said Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago.
“You are getting to a point where cotton is actually priced correctly,” he said, adding, market participants are currently keeping a close eye on the US dollar.
The dollar index rose to a near two-month high, earlier in the session, making greenback-denominated cotton costlier.
Investors were also keeping a close watch on Tropical Depression Beta, which was crawling inland along the Texas coast south of Houston, unleashing heavy rains and flooding.
“You haven’t seen any manic moves. Normally on hurricane issue you see some violent moves (in the market),” Marcus said, adding, the cotton market is not anticipating heavy damage from Beta.
The natural fiber had scaled its highest since late February, at 66.93 cents, in the previous week on crop damage concerns due to Hurricane Sally.
Meanwhile, the US Department of Agriculture’s (USDA) weekly crop progress report on Monday showed 45% of the crop was in good/excellent condition, unchanged from last week and up from last year’s 39%.
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