Benchmark cotton futures on ICE Futures US hit a more than three-month low on Friday before recovering on a sharp move lower in the US dollar, but ended July down 6.8 percent for their worst month since September 2014. "Emerging markets are not buying very much," said Peter Egli, director of risk management at British merchant Plexus Cotton Ltd. "Unless you have a dollar collapse, I don't see where the strength for commodities comes from."
A weaker dollar boosts greenback-traded commodities by making them less expensive to holders of other currencies. December cotton on ICE Futures US settled up by 0.66 cent on Friday, a 1 percent gain, at 64.21 cents per pound, after falling as low as 63.27 cents per pound, the lowest level since April 23. Total futures market volume rose by 6,224 to 20,085 lots. Data showed total open interest gained 608 to 177,722 contracts in the previous session. Certificated cotton stocks deliverable as of July 30 totalled 112,358 480-lb bales, down from 116,181 in the previous session. The dollar index was down 0.41 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 1.06 percent. Relative Strength Index in the most-active contract rose to 42.286.
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