Cotton dips on firm dollar; focus on planting report
- The dollar hit a more than four-month high, making cotton more expensive for buyers holding other currencies.
ICE cotton futures edged lower in choppy trading on Monday, pressured by a firmer dollar, while expectations for a reduction to forecasts for planted acreage in a federal report due later this week put a floor under prices.
Cotton contracts for May were down 0.12 cent or 0.2pc at 80.26 cents per lb by 10:59 A.M EDT. It traded within a range of 79.93 and 80.85 cents a lb.
The dollar hit a more than four-month high, making cotton more expensive for buyers holding other currencies.
The U.S. Department of Agriculture's planting intentions report is due at 1600 GMT on Wednesday. A Reuters poll forecasts U.S. cotton acreage at 11.905 million acres for the 2021/22 marketing year.
"The trade is looking for a number under 12 million acres because of the strong competition from soybeans, corn, groundnuts and grain sorghum," said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
In a potential escalation of tensions with top cotton buyer China, the United States on Saturday condemned China's sanctions against two American religious-rights officials in a dispute over Beijing's treatment of Uighur Muslims.
Last week, the China branch of the cotton trade body Better Cotton Initiative (BCI) said it had not found signs of forced labor related to cotton production in Xinjiang.
China could continue to buy U.S. cotton due to its quality and availability, Brown said, adding, "until they (China) can get a sure amount of their own cotton planted, they'll continue to buy U.S. cotton."
Total futures market volume fell by 37,042 to 9,081 lots. Data showed total open interest fell 3,334 to 228,758 contracts in the previous session.
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