Cotton ticks up on weaker dollar, West Texas rain forecasts cap upside

ICE cotton futures edged up on Tuesday drawing support from a weaker dollar though forecasts for rain in the top-producing West Texas region capped gains.

Cotton contracts for July rose 0.26 cent, or 0.3% to 83.08 cents per lb by 12:11 pm EDT (1611 GMT). It traded within a range of 82.4 and 83.53 cents a lb.

The dollar hit its lowest in over four months, making greenback-denominated cotton cheaper for buyers holding other currencies.

But StoneX Group's cotton risk management associate Bailey Thomen said progress with the cotton crop in the Southeast, especially in Georgia, and an improved outlook in West Texas due to recent rains were limiting gains and should keep cotton in the 82-84 cent range for the near-term.

The U.S Department of Agriculture's weekly crop progress report released on Monday showed that 49% of the cotton crop was planted by the week ended May 23. That compares with a five-year average of 52%.

The report also showed cotton was 61% planted in Georgia, up from 37% in the prior week.

"The (cotton) market is finding some overhead resistance at the 10-day moving average at 83.53 cents," Thomen added.

futures market volume fell by 905 to 15,497 lots. Data showed total open interest gained 107 to 221,800 contracts in the previous session.

cotton stocks deliverable as of May 24 totaled 136,192 480-lb bales, up from 131,061 in the previous session.