NEW YORK: ICE cotton futures rose on Thursday, as a weakened dollar provided some respite after concerns over higher supply of the natural fiber sent it to a one-week low in the previous session.
Cotton contracts for December rose 1.07 cent, or 1.2%, to 93.37 cents per lb, by 12:49 p.m. EDT, having hit its lowest since Aug. 24 on Wednesday. * Lowering the cost of purchasing cotton for buyers holding other currencies and potentially boosting demand, the dollar index fell to a near one-month trough.
“The market could be sensitive to where the dollar goes going forward and a lot of times the dollar can overwhelm supply and demand numbers,” said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
Adding support to the cotton market was an uptick across US grain markets.
But weighing on cotton, concerns of increased supply have emerged due to improving crop conditions with a United States Department of Agriculture (USDA) report earlier this week showing that about 70% of the crop was in good-to-excellent condition, well above the 44% for the same period a year ago.
Kansas-based commodity analyst Sid Love said that the report raised doubts over the USDA lowering its production estimate by a million bales last month and that it could increase its ending stocks estimate to about 3.5-4 million bales in its September demand and supply report.
“But that’s not significantly tighter, especially by historical standards, so it really shouldn’t have that much of a longer-term impact,” he added.
Market participants also took stock of the USDA’s weekly export sales report, which showed net sales of 105,200 running bales for 2021/2022 compared to the 245,100 RB reported in the prior week.
Comments
Comments are closed.