NEW YORK: ICE cotton futures rose more than 1% on Friday buoyed by a weaker dollar and tracking an uptick in grains, but were still headed for a weekly dip after the USDA’s acreage projections drove a sharp slide earlier this week.
Cotton contracts for December rose 1.03 cent, or 1.2%, to 86.93 cents per lb, at 13:09 p.m. EDT (1709 GMT). The combination of a weaker dollar and gains in grains are helping prices, said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.
“People are just standing aside until after the holiday, and then they’ll come send up a periscope on Monday or Tuesday and see what the weather is doing and what the world is up to at that point,” Love added.
The contract is set to edge down about 0.3% this week, driven mostly by Wednesday’s 3% drop after the USDA’s June acreage report projection of 11.7 million acres for all cotton in 2021 disappointed market expectations of a lower number.
“The higher-than-expected acreage number has put a lid on a market that didn’t have much upside momentum to begin with,” Peter Egli, director of risk management at British merchant Plexus Cotton said in a note on Thursday.
Global cotton production is projected to recover in 2021/22, after recording the lowest levels in the last 4 seasons in 2020/21, the International Cotton Advisory Committee (ICAC) said on Thursday.
Consumption gained 12.5% in 2020/21 and further improvement is projected for next season, recovering after the slowdown in the last year, the ICAC said.