NEW YORK: ICE cotton futures for December 2021 rose to their highest level on Wednesday, helped along by positive sentiment in key grains, Wall Street and a lower dollar.
Cotton contracts for December rose 1.08 cent, or 1.2%, at 89.54 cents per lb, at 13:19 p.m. EDT (1719 GMT) and hit a contract-high earlier as they rose as much as 1.6% to 89.88 cents per lb.
With this move, the December contract got past the previous high of 89.28 cents per lb, set on Feb. 25, a ceiling it had failed to breach so far.
“It’s a general lift across the board in agricultural markets and cotton had a good close yesterday, so technically it looks like it wants to wants to go higher,” helped by a weaker dollar and a higher stock market, said Jobe Moss, a broker with MCM Inc in Lubbock, Texas.
The dollar eased and was set to register its worst session since July 2, buoying cotton demand by making the fibre more affordable for buyers with other currencies.
Chicago grain futures jumped on Wednesday with corn at a near two-week peak, spilling over into cotton.
The S&P 500 index hit a record high on Wednesday after comments from the Federal Reserve fuelled hopes the central bank would stick to its accommodative monetary policy despite a sharp jump in inflation last month.
“We’re looking at a really good possibility of a really nice crop out here in West Texas. One more good rain in August and I wouldn’t be surprised to see 7 million or more bales for West Texas,” which could restrict how high prices go, Moss added.
Investors now look ahead to the US Department of Agriculture’s (USDA) weekly exports sales report on Thursday.
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