Cotton futures gained on Thursday after a weekly US government report showed a jump in export sales booked last week that slightly beat expectations. The benchmark December cotton contract on ICE Futures US edged up 0.36 cent, or 0.6 percent, to settle at 63.04 cents a lb. Foreign buyers' appetite for US cotton picked up in the week ended October 16, a weekly US Agriculture Department (USDA) report showed.
-- Foreign buyers book 78,800 upland bales in latest week: USDA
-- Rise in weekly export sales reported prompts short-covering
-- Demand situation remains 'tenuous'
Sales of upland cotton totalled 78,800 running bales, up from just 7,000 bales the previous week, the USDA data showed. "It was enough to make people question whether they want to stay short," said Louis Rose, an independent cotton trader and consultant at Risk Analytics in Tennessee. Even so, that was lower than the prior four-week average and included cancellations by buyers in Mexico and Korea.
"The demand situation is tenuous," said a US trader. Imports in China, the world's largest consumer, totalled 122,900 tonnes last month, down 39 percent from September 2013, according to the China Cotton Association. Beijing has said it will sharply curb imports in 2015, as the country shifts to direct farmer payments and abandons a three-year stockpiling program. That has led to worry over swelling global inventories. The world's stocks are expected to balloon to a record of 107.1 million bales by the end of July 2015.
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