NEW YORK: Cotton prices hit their highest in about a year-and-a-half on Friday and were on track for their best week since June after a US government crop report revised down projections for production and ending stocks.
The cotton contract for March was up 0.04 cent, or 0.1%, at 74.30 cents per lb by 12:50 p.m. EST (1750 GMT), after hitting its highest since May 2019 at 74.75 cents earlier in the session.
For the week, the contract is up more than 6%, its biggest weekly percentage gain since early June.
"We are up overall this week because of the WASDE report yesterday that showed a significant drop in production and ending stocks estimates, it really changed the tone of the market," said Jack Scoville, vice president at Chicago-based Price Futures Group.
The US Department of Agriculture in its latest World Agriculture Supply and Demand Estimates (WASDE) report showed lower US and world production and ending stocks estimates for the 2020/21 crop year. On Thursday, the weekly export sales report also showed net sales of 403,000 running bales for 2020/21, up 45% from the previous week and 61% from the prior 4-week average.
Limiting cotton gains, the dollar index rose 0.3% against its rivals, making the natural fibre more expensive for holders of other currencies. Total futures market volume fell by 19,523 to 15,687 lots. Certificated cotton stocks deliverable as of Dec. 10 totalled 86,544 480-lb bales, unchanged from the previous session.