NEW YORK: Cotton jumped more than 1% to a one-and-a-half-year high on Monday, supported by hopes for a potential Covid-19 vaccine and a rally in the grains market, while strong US data added to the upbeat mood. The cotton contract for March was up 0.91 cent, or 1.3%, at 73.87 cents per lb by 12:39 p.m. EST (1739 GMT), having earlier reached its highest level since May. 7, 2019, at 74.27 cents.
"AstraZeneca came out with its Covid-19 vaccine which looks promising, which is good for cotton and stock market," said Keith Brown, principal at cotton brokers Keith Brown and Co in the US state of Georgia. Drugmaker AstraZeneca said its Covid-19 vaccine could be around 90% effective and will have as many as 200 million doses by the end of 2020.
"Cotton is also higher because of the grains. Corn, beans and wheat has reinstated their bullish move based on drying weather in South America," Brown added. Chicago soybean futures rose to their highest level in 4-1/2 years on Monday, touching $12 a bushel as dry weather in key suppliers Brazil and Argentina stoked supply concerns.
US cotton market faces stiff competition from other cotton growers like Brazil, which sell their produce at a cheaper rate. Adding to the upbeat mood, data on Monday showed US business activity in November expanded at its fastest rate in more than five years, pointing to a recovery from the pandemic's economic damage.
Total futures market volume fell by 5,024 to 21,606 lots. Certificated cotton stocks deliverable as of Nov. 20 totaled 121,046 480-lb bales, up from 118,394 in the previous session.