NEW YORK: ICE cotton futures recovered some ground after dipping to an over one-week low on Friday, but were bound for a weekly dip on worries that rising COVID-19 cases could derail demand, while uncertainties prevailed over crop conditions.
The cotton futures contract for December added 0.36 cent, or 0.4%, to 93.12 cents per lb, by 1:09 p.m. EDT (1704 GMT), having earlier hit its lowest since Aug. 12 at 91.80 cents.
Cotton leaped to an over seven-year peak on Tuesday, but has backed off from those highs and is en route to its first weekly fall in two months.
"Uncertainty is playing into the outlook," Bailey Thomen, cotton risk management associate at StoneX Group, said, noting that doubts remain over the size and condition of the cotton crop even as it would likely be delayed by a few weeks. * "There is also a lot of uncertainty, especially with a recent surge in COVID-19 cases, but so far cotton demand is very steady and there's just a lack of supplies."
Market participants are reassessing the condition of the crop and supply after the US Department of Agriculture (USDA) cut its estimate for US production by more than half a million last week. * A separate weekly report by the agency however showed 67% of the cotton crop was in good to excellent condition, well above 45% for this time last year.
The USDA's weekly export sales report on Thursday showed net sales of 242,400 Running Bales (RB) for 2021/2022 and exports of 221,100 RB for the same period.
Total futures market volume fell by 5,722 to 21,304 lots. Data showed total open interest gained 3,134 to 267,752 contracts in the previous session.
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