Benchmark cotton prices on ICE were unchanged on Monday, buoyed by buying at key chart support even as worries lingered from a surprise drop in the US government's demand forecast. Cotton news over the past week was a "mixed bag but mostly not good for prices," Don Shurley, an agricultural economist at the University of Georgia, said in a note.
The US government on Friday shocked the market with a bearish increase in its outlook for global inventories in the 2015/16 crop year that begins on August 1 due to lower expected demand in top consumer China. Even so, an increase in the US export outlook for the current year was deemed supportive. Traders cited the 65-cent level as support. The second-month contract hit its 100-day moving average of 65.08 cents a lb before recovering.
December cotton contracts on ICE Futures US settled unchanged from the previous session at 65.52 cents per pound. Last week, the December contract dropped nearly 3 percent. Certificated cotton stocks deliverable as of July 10 totalled 148,522 480-lb bales, down from 148,529 in the previous session. The Thomson Reuters Core Commodity CRB Index, which tracks 19 commodities, was up 0.12 percent. Specs raised a net long position in cotton to a near two-year high of 46,884 from 41,279 in the latest week.