NEW YORK: Cotton futures rose 2% on Monday as Moderna Inc became the second drugmaker to announce positive data for a Covid-19 vaccine, boosting investors' sentiment on expectations of a strong rebound in demand for the natural fiber. The cotton contract for March rose 1.47 cents, or 2.1%, to 71.87 cents per lb by 12:17 p.m. EST (1717 GMT).
"The dollar is down a little bit and this is one of those days when all the markets are up; there is a lot of optimism regarding the new vaccine and that next year is going to be good for commodity consumption," said Rogers Varner, president of Varner Brokerage in Cleveland.
Based on interim data from a late-stage trial, Moderna said its experimental vaccine is 94.5% effective in preventing Covid-19. A gauge of global stocks hit a record on increasing vaccine optimism, while the dollar eased against rivals.
The March contract rose to its highest since Oct. 28 at 72.05 cents last Monday after Pfizer Inc announced that its drug was over 90% effective. The virus-induced restrictions and lockdown measures upended demand and pushed cotton prices to a multi-year low in April.
"The market seems excited today about a Moderna Covid vaccine. ... However, the lack of a US economic stimulus package and election uncertainty remain pitfalls for the market," Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
"Still, the Pfizer and Moderna vaccines look promising, but it will likely not be available worldwide over the near-term."
Two more US states imposed new curbs on gatherings as the country's total coronavirus cases crossed 11 million on Sunday, while global cases rose over 54 million according to a Reuters tally. Total futures market volume fell by 12,146 to 29,689 lots.