Cotton futures fell Wednesday in a late-day selloff, tracking losses in the larger commodity complex but remaining well within the prior session's range due to cautious dealings ahead of US export data set for release Thursday.
-- Cotton tracks drops in larger commodity index
-- Waning China import demand continues to pressure cotton
The most-active December contract on ICE Futures US fell 0.11 cent, or 0.2 percent, to settle at 62.68 cents a lb, nearing Tuesday's three-week low at 62.10 cents. The Thomson Reuters/CoreCommodity CRB Index, which tracks 19 commodities and is seen as a benchmark for the complex, changed direction and fell 1 percent as the larger oil and gold markets fell as the US dollar soared.
Cotton has been under pressure in recent weeks due to waning demand from China, the world's top importer, which plans to subsidise its domestic industry. Futures were slightly up for most of the day before an 0.34 cent drop in the session's final minutes, due largely to drops in December crude oil and the stock market, said Jobe Moss, a broker with MCM Inc in Lubbock, Texas. A falling oil price makes polyester less expensive, making it more attractive than natural fiber.
The session was nonetheless in range as traders awaited the release of US Agriculture Department export data Thursday. Last week's data showed US merchants sold just 7,000 bales the previous week, well below expectations. "Last week the exports were terrible," said Keith Brown, a principal at cotton brokers Keith Brown and Co in Moultrie, Georgia. "Surely we'll do better than that." Prices have hovered near five-year lows for nearly a month as major producers like India and the United States are anticipating strong 2014/15 harvests but have found support due to tight nearby supplies due to a delayed harvest.