By RECORDER REPORT | February 5, 2020
(Reuters): Cotton futures rose more than 1% on Tuesday aided by a recovery in equity markets as China ramped up stimulus measures to mitigate the economic impact of the coronavirus outbreak. March cotton settled up 0.51 cent, or 0.76%, at 67.35 cents per lb, after declining for four straight sessions. The March contract traded within a range of 66.85 and 68.23 cents a lb.
“China lowered interest rates and pumped liquidity into their markets, just to improve conditions and confidence in investors… That's enough to buoy grains and cotton," said Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago. In the past two days, the People's Bank of China has injected 1.7 trillion yuan ($242.74 billion) through open market operations, while sources told Reuters that policymakers are readying further measures to support the economy.
Demand for US cotton should remain relatively strong over the near- to medium-term, Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note. Rose cited Brazil's rapidly decreasing export supplies and high prices for African Franc Zone cotton as contributors to demand for US cotton.
Total futures market volume fell by 11,316 to 50,436 lots. Data showed total open interest fell 5,169 to 262,379 contracts in the previous session. Certificated cotton stocks deliverable as of February 4 totaled 12,709 480-lb bales, up from 6,792 in the previous session. – Reuters
(Source: Business Recorder)