ICE cotton futures rose on Friday boosted by speculator buying, as the March contract touched an all-time high and notched an eighth consecutive weekly gain. Cotton contracts for March settled up 0.59 cent, or 0.78 percent, at 75.92 cents per lb. The contracts traded within a range of 75.04 and 76.75 cents a lb, an all-time high.
Demand from speculators has been the biggest driver of prices this week, said Gabriel Crivorot, an analyst at Societe Generale in New York. Tuesday's US Department of Agriculture monthly crop supply and demand "report was pretty bullish, net fund positions keep getting longer and longer. There are a large number of unfixed sales positions ... everything seems to be aligning in a bullish way," he said.
The USDA raised its US cotton production forecast for 2017-18 by 63,000 bales and exports estimates by 300,000 bales compared with its outlook last month, while projecting ending stocks at 5.8 million bales as against 6.1 million bales seen in November. The USDA lowered its estimates for global 2017-18 cotton production and ending stocks.
The March cotton contract was up nearly 3 percent for the week. "The potential bad news lies in the fact that the possibility does exist that prices could continue to rise to a level where mills start to cancel purchases and replace with (cotton from) different, cheaper origins," Ron Lee, general manager at McCleskey Cotton in Bronwood, Georgia, said in a note.
This "would have a negative effect on our export sales and ultimately our ending stocks." Meanwhile, speculators raised net long position by 6,192 contracts to 82,602 in the week to Dec. 12, Commodity Futures Trading Commission data showed on Friday.
Total futures market volume rose by 12,005 to 45,460 lots. Data showed total open interest gained 4,528 to 261,667 contracts in the previous session. Certificated cotton stocks deliverable as of Dec. 14 totaled 47,628 480-lb bales, unchanged from the previous session.
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