Sep 29, 2020
NEW YORK: (Reuters): ICE cotton futures rose to a near two-week high on Monday on technical buying and as the dollar retreated from a two-month high, while increasing stocks due to the ongoing harvest limited gains. Cotton contracts for December rose 0.15 cent, or 0.2%, to 66.10 cents per lb, at 12:28 p.m. EDT (1628 GMT), having touched their highest since Sept. 16 at 66.60 earlier.
There is “just a little bit of speculative buying ... the market remains in range and right now is trending up towards the top end of the range after holding some support areas late last week,” said Jack Scoville, vice president at Chicago-based Price Futures Group.
Investors are buying after prices held above 65.50 last week, Scoville said, adding, an increase in the certified stocks due to the ongoing harvest, however, could weigh on prices. Certificated cotton stocks deliverable as of Sept. 25 totalled 12,155 480-lb bales, up from 10,484 in the previous session. Investors now eye the USDA’s weekly crop progress report due later in the day.
“Temperatures across the Mid-south are unseasonably cool, which does not aid the efficacy of defoliants and boll openers,” Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
“Early yield reports have been mostly disappointing, which we have feared would be the case with this crop.” Also helping cotton, the stock markets rallied, while the dollar fell from a two-month peak scaled in the previous session.
Speculators raised their net long position in cotton by 524 contracts to 42,266 in week to Sept. 22, data from the US Commodity Futures Trading Commission (CFTC) showed on Friday. Total futures market volume fell by 4,998 to 12,974 lots. Data showed total open interest gained 228 to 220,629 contracts in the previous session. — Reuters (Source: Business Recorder)