NEW YORK: ICE cotton futures inched higher in choppy trading on Monday as a weaker dollar warded off the effect of a slide in key Chicago grains.
Cotton contracts for December were up 0.06 cent, or 0.07%, to 89.72 cents per lb, at 12:01 p.m. EDT (1601 GMT), having lost 1.9% to trade at 87.96 cents per lb early in the session. Jordan Lea, senior trader at DECA Global, said drops in the dollar and grains are cancelling each other out.
Chicago soybeans dropped on Monday to their lowest level in two weeks while corn also weakened, as forecasts of cooler weather in parts of the US Midwest and slowing demand in top buyer China weighed on prices. Wheat prices also fell. The dollar eased, helping prices of cotton by making the fiber more affordable for buyers using other currencies.
Lea added that a forecast of slightly drier and hotter weather for August is favorable for cotton production, as “you would see the crop start to catch up a little bit, and really start to mature.”
Market participants await a federal weekly crop progress report later on Monday.
Total futures market volume rose by 1,279 to 14,096 lots. Data showed total open interest gained 666 to 242,044 contracts in the previous session.