CHICAGO: ICE cotton futures steadied into a tight range on Wednesday as investors awaited direction from the U.S. Department of Agriculture’s (USDA) weekly export sales report.
Cotton contracts for March steadied at 105.29 cents per lb by 11:33 a.m. ET (1633 GMT). Prices traded between 105.5 and 106.63 cents a lb.
“Cotton seems to be trading in very light volume and is going to be trapped in this price range for the rest of the year, unless some type of macro development moves the prices. Cotton has had a great year and it seems like the funds don’t want to mess it up,” said Louis Barbera, partner and analyst at VLM Commodities Ltd.
Also influencing the cotton market, wheat is easing off and oil is down, added Barbera.
U.S. wheat futures fell as a bumper Australian harvest and signs of continued competition from Black Sea supplies added to recent technical pressure.
Meanwhile, oil prices fell for the third straight day on growing signs that supply growth will outpace demand next year. Lower oil prices make polyester, a substitute for cotton, less expensive.
Traders now await the USDA’s weekly export sales report due on Thursday, while wider markets awaited cues on unwinding of pandemic-led stimulus from the Federal Reserve upon the conclusion of its two-day policy meeting.
Total futures market volume fell by 6,953 to 7,854 lots. Data showed total open interest fell 1,264 to 233,174 contracts in the previous session.
Certificated cotton stocks deliverable as of Dec. 14 totalled 8,007 480-lb bales, unchanged from the previous session.
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