NEW YORK: ICE cotton futures touched their highest in over two weeks on Monday, drawing support from a stronger core grains market and a weaker dollar as the market looks ahead to key quarterly crop data.
Cotton contracts for December rose 0.32 cent, or 0.4%, at 87.50 cents per lb, at 12:10 p.m. EDT (1610 GMT), after hitting their highest since June 11 at 87.94 cents.
“There’s some sympathy being derived by cotton out of corn and beans, which are up because we need a perfect growing season and we’re not going to have that this year,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
Chicago soybeans, corn and wheat rose, with forecasts of hot weather in US grain belts and estimates later this week of US grain inventories and plantings in focus.
The dollar edged lower, making cotton affordable for other currency holders.
Once the acreage report is out on Wednesday, “we really start honing in on weather and demand, and demand has been running pretty strong this season,” Brown said, adding “the big issue for Texas is how many acres did go into sorghum and not cotton.”
Analysts and traders in a Reuters poll estimate cotton plantings for 2021 at 11.856 million acres in US Department of Agriculture’s (USDA) June 30 acreage report, down from March’s 12 million acres.
Market participants are also awaiting a weekly crop progress report by the USDA later today.
Total futures market volume fell by 3,504 to 8,294 lots. Data showed total open interest gained 1,080 to 211,083 contracts in the previous session.
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