Cotton futures advanced on Thursday in choppy dealings, supported by strength in grains and equities markets. The most active March cotton contract on ICE Futures US closed up 0.17 cent, or 0.3 percent, at 60.82 cents a lb after trading on either side of unchanged throughout the session.
Buying in grains markets, especially wheat and soybeans, spilled over to fiber. Cotton tends to track the markets for grains with which it competes for acreage. Stock markets also lent support. They rose on a promise from the Federal Reserve to take a "patient" approach to hiking benchmark US interest rates. "Producers are basically done selling for the year, so it does not take much buying" for futures to rise, said Jack Scoville, a vice president at Price Futures Group in Chicago.
The gains came despite a disappointing weekly US government export sales report that showed a decline in both new sales and shipments on previously booked orders. The US Department of Agriculture data also showed cancellations of 70,500 bales of upland cotton to buyers in Indonesia, Turkey, and China. Indonesia accounted for the majority of the cancellations at 44,000 bales, but Turkish buyers cancelled another 17,600 bales of upland cotton, USDA data showed.
That stoked worries over demand in one of the country's top markets as Turkey's government continues its anti-dumping investigation on US cotton. Turkey's appetite for US cotton has slowed since the investigation was announced in October. The country's spinners have criticised the probe and said they may have to turn to other origins.
Comments
Comments are closed.