NEW YORK: ICE cotton futures rose to a near one-week high on Wednesday, supported by a weaker dollar and strong demand for the natural fiber ahead of a federal weekly export sales report.
The cotton contract for December was up 0.93 cents, or 0.9%, at 109.64 cents per lb by 12:28 p.m. ET (1628 GMT). It traded within a range of 107.66 and 110.65 cents a lb.
“Typically when the US harvest surpasses 50% and we’re approaching that now, the market tends to shift its focus from supply to demand,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Georgia.
“The US and China are re-engaging on trade talks... so we’re seeing some anticipatory trading in cotton, corn, beans, wheat,” he added.
China’s Vice Premier Liu He spoke with US Treasury Secretary Janet Yellen on Oct. 26 via video call about the macroeconomic situation and bilateral relations, according to a statement from China’s commerce ministry.
The dollar slipped 0.1% against its rivals, potentially lifting demand for cotton by making it less expensive for buyers holding other currencies.
Investors now await the US Department of Agriculture’s weekly export sales report scheduled for release on Thursday.
Last week, the report showed cotton sales were up “noticeably” from the previous week and up 20% from the prior four-week average. The increases were primarily for China.
Meanwhile, the USDA’s weekly crop progress report on Monday showed 35% of the cotton was harvested in the week ending Oct. 24 compared to 28% the week before.
Total futures market volume rose by 957 to 22,958 lots. Data showed total open interest gained 589 to 285,111 contracts in the previous session.
Comments
Comments are closed for this article.