NEW YORK: ICE cotton futures gained on Thursday, supported by a weaker dollar and a strong weekly US export sales report, with risk-on sentiment in the equity markets adding to the upbeat mood.
The cotton contract for December was up 0.81 cent, or 0.89%, at 91.68 cents per lb by 11:03 a.m. ET (1503 GMT). The contract is up for the third straight session.
“The obstacles of the Federal Reserve’s tapering and China Evergrande real estate event are sort of put on hold right now allowing the stock market rise. And the dollar is down today,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
“And, of course, cotton sales were up, with China being the lead buyer. All these factors are helping cotton prices today.”
The dollar fell 0.5% against its rivals, making cotton less expensive for buyers holding other currencies.
The sentiment in wider financial markets remained upbeat as investors largely brushed off concerns over the Federal Reserve’s plans for tapering.
Meanwhile, the US Department of Agriculture’s weekly export sales report showed net sales of 345,400 running bales for 2021/2022, were up 21% from the previous week, with increases primarily for China.
Total futures market volume fell by 6,446 to 11,197 lots. Data showed total open interest gained 202 to 262,785 contracts in the previous session.
Certificated cotton stocks deliverable as of Sept. 21 totalled 60,976 480-lb bales, unchanged from the previous session.
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