August 6, 2020
NEW YORK: (Reuters): ICE cotton futures rose on Wednesday, trading just below a 4-month peak hit in July, as continued hot weather concerns along with a sliding dollar supported the virus-hit natural fiber market.
Cotton contracts for December rose 0.28 cent, or 0.4%, at 64.29 cents per lb at 12:13 p.m. EDT (1613 GMT). Prices earlier in the session hit 64.45, their highest since early July, when prices jumped to an over 4-month peak.
"The hot weather in Texas, the trade deal with China and a weaker dollar, added together is supporting the market," said Rogers Varner, president of Varner Brokerage in Cleveland. However, "in the mid-60 cents range the price is too high, considering the demand prospects are not too good," Varner said.
Severe hot and dry weather in Texas, the largest cotton producing state in the US, and the Carolinas has sparked fears of crop damage among producers.
The United States Department of Agriculture's weekly crop progress report on Monday also showed a slight deterioration in crop quality. The market has already been reeling under the impact of the global pandemic as lockdowns to prevent the spread of the virus cut demand.
The dollar index slid to a near 2-year low on Wednesday, making commodities priced in the US unit, like cotton, cheaper for holders of other currencies.
Supporting the market further was some optimism on the trade deal between United States, the biggest cotton exporter and China, it's largest buyer. Senior US and Chinese officials will review the implementation of their Phase 1 trade deal during an Aug. 15 videoconference.
Total futures market volume fell by 7,596 to 13,609 lots. Data showed total open interest gained 2,577 to 181,232 contracts in the previous session. -- Reuters (Source: Business Recorder)