NEW YORK: ICE cotton futures eased off a contract high hit earlier on Thursday after a weekly report by the US Department of Agriculture showed a decline in the exports of the natural fibre crop.
Cotton contracts for December fell 0.16 cent, or 0.2%, to 89.65 cents per lb, at 11:39 a.m. EDT (1539 GMT), having earlier hit a high of 89.95 cents per lb.
In the previous session, the contract got past the previous high of 89.28 cents per lb set on Feb. 25.
“Today’s sales and shipments were rather poor. They weren’t terrible, but they weren’t as good as they’ve been in the last several months,” said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
The USDA’s weekly export sales report showed net sales of 34,500 running bales (RB) for the 2020/2021 marketing year, down 34% from the previous week and 51% from the prior four-week average.
The report also showed exports of 185,900 RB were down 37%from the previous week and 31% from the prior 4-week average.
The dollar ticked up, putting some pressure on cotton prices by making the fibre more expensive for buyers with other currencies.
“I think the Chicago markets will put a strong force underneath cotton. As long as wheat, corn and soybeans are up, cotton can’t go down too far,” Varner said, adding cotton was likely to consolidate at current levels in the near-term.
Chicago corn and soybean futures edged down on Thursday after rallying the day before, as prices faced chart resistance and market participants assessed contrasting conditions for US crops.
Total futures market volume fell by 16,857 to 11,923 lots. Data showed total open interest gained 7,225 to 233,963 contracts in the previous session.