NEW YORK: ICE cotton futures ticked up on Thursday as focus turned to a robust demand outlook for the natural fibre ahead of a federal weekly export sales report.
Cotton contracts for December rose 0.28 cent, or 0.3%, to 84.94 cents per lb by 12:16 pm EDT (1612 GMT). It traded within a range of 84.7 and 85.43 cents a lb.
Market participants awaited a weekly export sales report from the US Department of Agriculture (USDA) due on Friday.
“The assumption (in the cotton market) is that demand is going to be there and the crop is probably not going to be big enough this year, maybe even next year, to meet demand, so we’ll see prices supported,” said Jordan Lea, senior trader at DECA Global.
Traders were also keeping an eye on weather in the top cotton producing West Texas region.
While recent rains in West Texas could create some temporary challenges to production, in the long term it should be beneficial as the water disperses into the soil, Lea said, adding that higher grain prices could create a “multi-year challenge” for US cotton acreage.
In its weekly crop progress report released on Tuesday, the USDA rated 30% of the cotton crop in Texas in poor-to-very poor condition.
Total futures market volume fell by 11,071 to 22,022 lots. Data showed total open interest gained 75 to 230,386 contracts in the previous session.