NEW YORK: ICE cotton futures snapped a five-session long streak of gains on Monday, weighed down by weaker grains, a stronger dollar and technical resistance.
Cotton contracts for December fell 1.26 cents, or 1.4%, to 90.44 cents per lb, by 11:04 a.m. EDT (1504 GMT).
ICE cotton futures scaled a new contract peak on Friday, as a strong US jobs report lent a further boost to a positive demand outlook.
“Nothing fundamental has changed since the end of last week, there is definitely some anxiety over how much further this market can go right now, with some resistance at 92 cents before we go back towards the mid 90s” said Jordan Lea, senior trader at DECA Global.
Standard influences, the US dollar and Chicago grains, were also likely weighing on cotton, Lea said.
Chicago corn and wheat eased as strength in the dollar and a slide in crude oil curbed US grain prices, countering recent concerns about global harvest prospects. Soyabeans also dipped.
Market participants await a federal weekly crop progress report later on Monday, and a monthly supply and demand report later this week.
“The market will likely soon begin to add risk premium if rains do not materialize over much of The Belt,” Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
“Most US cotton growers will likely only see light to moderate shower activity this week - and many growers will be more than ready for another round of showers/rain by the end of the coming week.” * Total futures market volume fell by 19,227 to 9,777 lots. Data showed total open interest gained 5,485 to 257,301 contracts in the previous session.
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