17 Oct 2020
NEW YORK: 9Reuters): ICE cotton futures jumped to their highest in more than eight months on Friday, as the dollar weakened and rains in major growing regions delayed harvest of the natural fibre. The cotton contract for December rose 0.76 cent, or 1.1%, at 69.98 cents per lb by 1:31 p.m. EDT (1731 GMT).
The front-month contract earlier hit its highest since Jan. 30 at 70.04 cents and was on track for a second straight weekly gain, rising 3.5% so far this week. "We had modest scattered showers yesterday in the Delta region, which probably has slowed the harvest a little bit; everyday you're not harvesting, you're loosing some yield," said John Bondurant, a trader in Memphis, Tennessee.
A jump in September's US retail sales, with receipts at clothing stores rising 11%, was also providing support, Bondurant said, although sales remained well below their pre-pandemic levels. The dollar fell 0.2% against rivals.
"With a friendly technical picture, a struggling US dollar, strong grain and oilseed markets and mills caught on the wrong foot with their sizeable unfixed on-call position, it becomes increasingly difficult to make a bearish case," British merchant Plexus Cotton said in a note on Thursday.
The market largely ignored a relatively poor weekly export sales data, with net sales down 45% from the previous week for period ending Oct. 1. Meanwhile, reports that China has ordered cotton mills to stop buying Australian supplies, could help the US cotton market a bit, said Rogers Varner, president of Varner Brokerage in Cleveland.
"Australia has a lot of very high quality cotton and if we pick up some of that demand, that would help." Certificated cotton stocks deliverable as of Oct. 15 totalled 25,973 480-lb bales, up from 24,457 in the previous session. – Reuters (Source: Business Recorder)