NEW YORK: ICE cotton futures fell to a near one-week low on Tuesday as investors booked profits after prices rose more than 1% in the previous session, while a softer US dollar limited further downside.
The cotton contract for March fell 0.73 cent, or 0.9%, to 81.60 cents per lb by 1:19 p.m. EST (1819 GMT), having earlier touched its lowest since Jan. 20.
The natural fibre rose to a more than two-year high of 83.06 cents per lb in the previous week.
“Yesterday prices got up close to previous highs and this is a short-term correction in the over all up move. The trends are still up,” said Jack Scoville, vice president at Chicago-based Price Futures Group.
Offering some respite to cotton, the US dollar slipped 0.2% against key rivals.
A weaker dollar makes greenback-denominated natural fibre cheaper for investors holding other currencies.
Investor appetite for riskier assets rose due to strong earnings updates in the United States, but US Treasury yields hovered close to a three-week low on concerns about potential roadblocks to US President Joe Biden’s $1.9 trillion stimulus plan.
The Biden Administration’s massive coronavirus relief package has been drawing strong opposition from Republicans, who say the proposal is too expensive.
Total futures market volume fell by 81 to 29,857 lots.
Certificated cotton stocks deliverable as of Jan. 25 totalled 73,984 480-lb bales, up from 73,722 in the previous session.