29 July 2021
NEW YORK: ICE cotton futures posted a new contract high on Wednesday on robust global demand and firmer Chicago grain prices, while markets awaited a key export sales report. Cotton contracts for December added 0.27 cent, or 0.3%, to 90.50 cents per lb, by 11:42 a.m. EDT (1542 GMT), earlier rising to a contract high of 91.00 cents per lb.
"Most of it is the arbitration price between the US and China, which at $1.00 a bale is huge, and as long as that price gap exists, cotton won't go down," with demand for exports still good, said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
"The Chicago markets are holding some high prices, that's a positive," Varner said, and "there's no problem for supply around the world. It is the good demand prospects that keep cotton at 90 cents."
US wheat futures rallied more than 2% on Wednesday on increasing concerns over US supplies after a tour showed crop damage due to dry weather in a key producing state.
Corn edged higher while soybean futures were flat, both also supported by recent damage to US crops. Investors now look ahead to the US Department of Agriculture's weekly exports sales report on Thursday.
"The report should offer evidence that the USDA has significantly overestimated US exports for 2020/21, which will cause beginning stocks for 2021/22 to be higher than currently projected," Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
Total futures market volume fell by 10,780 to 13,166 lots. Data showed total open interest gained 3,167 to 245,376 contracts in the previous session. (Source: Business Recorder)