NEW YORK: Cotton prices fell to a more than one-week low on Friday as the dollar strengthened and concerns over US-China trade relations resurfaced, keeping the natural fiber on track to post its worst week since October.
Cotton contracts for May fell 0.31 cent, or 0.4%, to 85.14 cents per lb at 12:46 p.m. EDT (1646 GMT). The contract was down 2.8% so far this week, its biggest drop since the week of Oct. 30, 2020.
“The first face to face meeting between the new Biden Administration and China didn’t go very well,” which is negative for cotton, said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia
The high-level US-China meeting got off to a fiery start, with both sides levelling sharp rebukes of the others’ policies.
The United States is the largest exporter of cotton, while China is the biggest consumer.
Meanwhile, cotton prices had declined over 2% earlier in the session to 83.65 cents, their lowest since March 10.
Speculators liquidating long positions drove prices to the session’s low,
amid a firm dollar, Brown said, but added that “cotton is little overdone to the downside and could try to trade up.”
The dollar rose to a more than one-week high against a basket of major currencies, making cotton costlier for investors holding other currencies.
Total futures market volume rose by 2,019 to 22,098 lots. Data showed total open interest fell 895 to 231,387 contracts in the previous session.
Comments
Comments are closed for this article.