NEW YORK: ICE cotton steadied off a one-week peak in choppy trading on Tuesday as a firmer dollar offset support from stronger grains and oil markets.
Cotton contracts for December were up 0.03 cents, or 0.03%, at 88.19 cents per lb at 13:29 p.m. EDT (1729 GMT) after touching their highest since July 6 at 88.48 cents.
Gains in the dollar and petroleum are balancing each other out, pushing cotton into a small trading range, said Kansas-based commodity analyst Sid Love.
The dollar rose, potentially weighing on demand by making cotton more expensive for buyers with other currencies.
But propping up cotton prices and driving gains earlier in the session were higher oil prices, which could prove a fillip to demand for the natural fibre by pushing up prices of synthetic fibres.
Sentiment in cotton markets was also boosted by gains in Chicago grain futures, with corn up more than 2%.
Cotton climbed on Monday after the United States Department of Agriculture’s (USDA) July World Agricultural Supply and Demand Estimates report showed lower world ending stocks estimates for the 2021/22 marketing year.
“Market participants have a new set of official figures upon which to trade, but most do not seem eager to do so,” Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
“This is quite possibly because it is evident that the USDA’s thoughts on US exports and world aggregate consumption essentially equate to pipe dreams,” Rose added.
Total futures market volumes fell by 5,850 to 11,772 lots, while total open interest gained 134 to 223,403 contracts in the previous session.
Investors also took stock of a weekly USDA report showing that 54% of the crop was in good-to-excellent condition, up from 52% a week ago.
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