NEW YORK: ICE cotton futures rose on Friday and were on track to gain for a fifth straight week, as a weaker US dollar made the natural fiber less expensive for overseas buyers.
The cotton contract for March was up 0.44 cent, or 0.4%, at 115.16 cents per pound by 11:06 a.m. ET (1606 GMT).
The contract is up more than 2% so far this week.
“The dollar is down today, which is helping the market. The demand for US cotton is very robust, but there are two sides to that equation, sales and shipments - we are struggling with our shipments,” said Keith Brown, principal at Keith Brown and Co in Georgia.
The US dollar was down 0.5% against a basket of major currencies on the heels of the December jobs report that missed expectations. On Thursday, the US Department of Agriculture’s weekly export sales report showed net sales of 143,200 running bales for 2021/2022, down 26% from the previous week. Exports were at 104,900 RB, down 35% from the previous week.
“Slow pace of shipments is starting to turn into a real problem, because it leads to a shortage of cotton at various destinations, while causing a potential inventory overhang at origin down the road,” said Peter Egli, director of risk management at British merchant Plexus Cotton, in a note dated Thursday.
Wall Street’s main indexes were muted on Friday after data pointed to weaker-than-expected job growth last month.
Total futures market volume fell by 10,250 to 11,869 lots. Data showed total open interest rose by 1,344 to 245,382 contracts in the previous session.
Comments
Comments are closed for this article.