NEW YORK: ICE cotton futures gained more than 1 percent on Wednesday as concerns that dry weather in key-producing regions in Texas would hit the natural fibre crop, with a further boost coming from a slight retreat in the dollar.
The cotton contract for July was up 0.94 cent, or 1.12%, to 84.71 cents per lb by 12:59 p.m. EDT (1659 GMT). It traded within a range of 83.5 cents and 84.78 cents a lb.
“The dollar is down and the weather outlook for Texas is dry,” lifting prices, said Rogers Varner, president of Varner Brokerage in Cleveland.
The dollar edged down against a basket of currencies, lowering the cost of greenback-denominated cotton for buyers holding other currencies.
“It is very possible” that prices could return to levels seen in February if the weather situation in Texas worsens, said Bailey Thomen, cotton risk management associate with StoneX Group.
Market participants await a weekly export sales report from the US Department of Agriculture due on Thursday.
“Expect to see figures similar to last week’s. Sales are expected to be down a little bit at this point in the season as there isn’t quite enough cotton left to be sold,” Thomen said, adding that “exports should continue at a pretty good pace.”
The natural fibre was also helped by corn and soybeans touching multi-year highs.
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