NEW YORK: ICE cotton futures inched higher on Wednesday ahead of a federal export sales report as hopes for a massive stimulus measure from the United States offered support to the natural fibre.
The cotton contract for March rose 0.10 cents, or 0.1%, to 80.79 cents per lb by 1:43 p.m. EST (1843 GMT).
It traded within a range of 80.45 and 81.14 cents a lb.
“The market is preparing for the upcoming reports - export sales, WASDE and the planting intention. Traders are positioning themselves before that,” said Peter Egli, director of risk management at British merchant Plexus Cotton.
“The stimulus is being pushed through and that is another reason why traders are probably a little more bullish because they are seeing the big stimulus package being rammed through and that is inflationary for prices,” he added.
Democrats in the US Congress on Tuesday took the first steps toward advancing President Joe Biden’s proposed $1.9 trillion coronavirus aid plan without Republican support.
Investors now await the USDA’s weekly export sales report, due on Thursday, while the highly anticipated monthly World Agricultural Supply and Demand Estimates (WASDE) report is due next week.
“We have seen purchases coming out of Asia, so demand is good. Also, people are far more optimistic in the long term about the progress of the vaccine,” said Barry Bean, a cotton buyer based in Gideon, Missouri.
Total futures market volume fell by 18,767 to 27,595 lots. Certificated cotton stocks deliverable as of Feb. 2 totalled 81,879 480-lb bales, unchanged the previous session.—Reuters