NEW YORK: ICE cotton futures rose on Tuesday, supported by firmer stock markets and increased optimism surrounding a large fiscal stimulus in the Unites States, although a stronger dollar kept prices in check.
The cotton contract for March rose 0.51 cent, or 0.6%, to 80.54 cents per pound by 12:43 p.m. EST (1743 GMT).
It traded within a range of 79.8 and 81.01 cents a pound.
“There is a little bit of spec buying. The stock markets are higher. Coronavirus vaccines are getting around and it looks like we are going get stimulus of some kind,” said Jack Scoville, vice president at Chicago-based Price Futures Group.
Also, “fundamentally we deserve higher prices, (as) our ending stocks levels are significantly less, we have less production here and good demand,” he added.
Global stock markets surged for a second day on Tuesday, spurred by hopes around more US stimulus and swift economic recovery.
The Democratic-led US House of Representatives prepared to take the first step forward on President Joe Biden’s $1.9 trillion COVID-19 relief package on Tuesday, with a key vote expected to fast-track the measure through Congress.
Meanwhile, the dollar rose to a two-month high against key rivals, making greenback-denominated natural fibre costlier for investors holding other currencies.
Total futures market volume fell by 20,750 to 27,967 lots.
Certificated cotton stocks deliverable as of Feb. 1 totalled 81,879 480-lb bales, up from 80,653 in the previous session.