NEW YORK: ICE cotton ended a three-session streak of gains on Wednesday, falling in tandem with dips in corn and wheat futures, with a stronger dollar adding further pressure. Cotton contracts for December were down 0.36 cent, or 0.4%, at 87.04 cents per lb at 11:51 a.m. EDT (1551 GMT).
“We’re seeing that corn and wheat are trading quite a bit lower today again,” and negativity from that is carrying over to cotton, said Bailey Thomen, cotton risk management associate at StoneX Group.
Chicago corn futures fell well over 2% on Wednesday, and were trading near their lowest levels in more than a week, while wheat contracts also slipped.
Tuesday’s volatility could have “knocked some people out of the market in terms of their positions, and today could be just a little bit of repositioning,” Thomen added.
Cotton futures closed marginally up in choppy trading on Tuesday, retreating after touching their highest level in more than four months earlier in the session.
The dollar rose, making cotton more expensive for other currency holders, and potentially weighing on demand.
The US Department of Agriculture’s (USDA) weekly crop progress report on Tuesday showed 52% of the crop was in good-to-excellent condition, identical to a week ago.
Total futures market volume fell by 20,818 to 11,196 lots. Data showed total open interest gained 2,326 to 221,249 contracts in the previous session.
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