NEW YORK: ICE cotton futures climbed to a one-week peak on Wednesday, bolstered by a weaker dollar and worries over crop loss due to heavy rainfalls in major growing regions.
Cotton contracts for December rose 0.99 cent, or 1.2%, at 86.63 cents per lb, by 12:49 p.m. EDT (1649 GMT), having earlier risen to their highest since June 16 at 86.88 cents.
“The dollar is trading a little bit lower today, so that might be lending just a bit of support,” said Bailey Thomen, cotton risk management associate at StoneX Group.
Market participants were also watching out for crop damage due to heavy rainfalls from Tropical Storm Claudette that hit most of southeastern US states during the weekend.
Damage to the crops in the delta region is “something that’s still being evaluated... especially because some of the regions are still waiting for the flood waters to dry out a bit, but it’s likely that we’ll see some lost crops as a lot of area was pretty much inundated for a long time,” Thomen said.
Severe thunderstorms and heavy rainfall are forecast for the US delta region, according to the National Weather Service.
The dollar index was hovering near a one-week low, making cotton affordable for holders of other currencies.
Investors are now awaiting US Department of Agriculture’s (USDA) weekly exports sales on Thursday.
Total futures market volume fell by 5,213 to 13,811 lots. Data showed total open interest gained 650 to 207,866 contracts in the previous session.
Certificated cotton stocks deliverable as of June 22 totalled 165,925 480-lb bales, down from 166,187 in the previous session.
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