NEW YORK: ICE cotton futures rebounded on Friday as traders took advantage of recent dips to pick up the natural fibre as the focus also turned to drier weather in the southeast United States, likely to hinder planting.
Cotton contracts for July rose 0.98 cent, or 1.2%, to 82.51 cents per lb by 1:02 pm EDT (1702 GMT), setting the natural fibre up for a modest weekly gain of 0.1%. Prices traded within a range of 81.53 and 83.97 cents a lb.
“All eyes are on the weather and we’re too dry in the southeast,” said Jordan Lea, senior trader at DECA Global, adding that while recent rains in Texas have helped the cotton crop, more rain would be needed throughout the summer for planting to continue.
Lea said prices were likely to trade between the 80 and 90 cent range over the next 6-12 weeks.
The market also took support from higher net sales and exports in the US Department of Agriculture’s weekly report on Thursday.
“US prices are once again competitive and enquiries from various markets, including China, have increased this week, especially since origins like Brazil or India have seen their basis firm up,” Peter Egli, director of risk management at British merchant Plexus Cotton, said in a note dated May 20.
Total futures market volume fell by 11,051 to 24,577 lots. Data showed total open interest fell 1,642 to 221,273 contracts in the previous session.
Certificated cotton stocks deliverable as of May 20 totalled 122,987 480-lb bales, up from 121,620 in the previous session.
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