ICE cotton fell on Thursday as weekly US government export sales data suggested that beyond a large sale to Mexico, whose purchases are seen as a given, demand for US cotton remained weak world-wide despite low prices. "Mexico only consumes as much as it consumes, and there's only one place you can get it," said Ron Lawson, a partner at commodity investment firm Logic Advisors in Sonoma, California, explaining that Mexico's large purchases this week did not suggest that the country would be importing more cotton overall.
US export sales totalled 206,900 bales for the 2015-16 crop year, up 76 percent from the prior week. However, 128,100 of those bales came from Mexico, which also purchased 358,300 bales for the 2016-17 crop year. Excluding Mexico's large purchases, which are unlikely to be recurring, this week's 2015-16 sales were down 33 percent from the prior week, when Mexico was not a buyer.
Traders looked ahead to Friday's monthly US government supply and demand report, which would give the latest indications as to the size of the US crop currently being harvested as well as the level of world demand. December cotton on ICE Futures US settled down by 0.33 cent on Thursday, a 0.5 percent loss, at 61.72 cents per pound. It traded within a range of 61.44 and 62.45 cents a pound.
Total futures market volume rose by 285 to 17,375 lots. Data showed total open interest fell 155 to 189,606 contracts in the previous session. Certificated cotton stocks deliverable as of October 7 totalled 43,604 480-lb bales, down from 44,364 in the previous session. The dollar index was down 0.30 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 0.86 percent. The Relative Strength Index in the most-active contract fell to 49.166.
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