JULY 10, 2020
July 9 (Reuters) - ICE cotton futures edged lower having hit a four-month high on Thursday ahead of the U.S. Department of Agriculture’s (USDA) monthly supply-demand report, which is expected to show a decline in production of the natural fiber.
* Cotton contracts for December fell 0.21 cent, or 0.3%, at 63.95 cents per lb by 2:23 p.m. EDT (1823 GMT). Prices had earlier climbed to their highest since March 3 at 64.90.
* The USDA’s World Agriculture Supply and Demand Estimates (WASDE) report is due on Friday at 12 pm EDT.
* “When you consider the conditions in Texas, cotton isn’t really doing all that well,” said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.
* “The anticipation (from Friday’s report) is that the world production is going to be down because U.S. supply will be down and world carryover stocks are probably going to be down, so things are tightening up a little bit.”
* The natural fiber has rallied more than 9% since a federal report last week showed a reduction of 11% in planted acres from last year, while hot and dry spell in top-producing Texas has also supported prices.
* “It (cotton price) has advanced far too much on the planted acreage report,” said Judy Ganes, a U.S.-based soft commodities analyst.
* She added, “the USDA needs to make further cuts to world demand. They were too giddy about a quick recovery.”
* The weekly export sales data from the USDA showed net sales for 2019/20 were down 35% from the previous week, while exports were up 19% for the period ending July 2.
* The market has been struggling with surplus supply since the coronavirus pandemic sapped global consumption.
* Total futures market volume fell by 2,375 to 18,835 lots. Data showed total open interest gained 2,391 to 170,877 contracts in the previous session. – Reuters (Source: https://af.reuters.com)