NEW YORK: Cotton prices rose over 1% on Monday after the first successful clinical trial of a Covid-19 vaccine lifted sentiment and boosted optimism about demand of the natural fibre, a day ahead of the federal supply demand estimate report. The cotton contract for December rose 1.28 cents, or 1.9%, to 69.90 cents per lb at 12:55 p.m. EST (1755 GMT).
"It all has to do with the announcement by Pfizer. If the Covid-19 is over then the market can start trading on the fundamentals rather than on fear," said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.
Pfizer Inc said on Monday that its experimental Covid-19 vaccine was more than 90% effective. The company, along with its German partner BioNTech SE, said it expects to seek US emergency use authorization later this month.
Wall Street followed world equity indexes to record levels while the grains market rose on the promising developments toward a vaccine. Cotton prices had fallen to their lowest since 2009 to below 50 cents in April after the pandemic shuttered businesses and upended demand.
With over 50 million people reported to be infected by the novel coronavirus globally, as per a Reuters tally, the United States became the first country to surpass 10 million cases on Sunday. Markets participants are now awaiting the US Department of Agriculture's (USDA) monthly World Agriculture Supply and Demand Estimates (WASDE) report on Tuesday.
Expectation that the USDA will be reducing the US crop estimate in Tuesday's report is also supporting the natural fibre, Love added. Total futures market volume fell by 22,076 to 40,761 lots. Data showed total open interest fell 952 to 245,851 contracts in the previous session.
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