Cotton futures hit two-week high
Cotton futures rose to the highest in two weeks on Monday, supported by strong demand as concerns over dry weather in Texas persisted amid expectations of deteriorating conditions for the natural fibre crop in a US government report. “Weather is the main driver of December prices, but strong demand is also helping,” said Louis Rose, an independent cotton trader and consultant with Risk Analytics in Memphis, Tennessee.
Traders awaited crop progress data due after market close on Monday.
Concerns over the quality of production in the east of China, which has been hit by floods, and the Xinjiang crop, which has been affected by high temperatures, were also supportive to prices, according to Jim Lambert, director of sales at FCStone Merchant Services. The market also factored in the latest forecasts from the International Cotton Advisory Committee (ICAC), which lowered its outlook for inventories of the natural fiber for the 2016-17 crop year.
The December cotton contract on ICE Futures US settled up 0.34 cent, or 0.46 percent, at 74.38 cents per lb. It traded within a range of 73.46 and 74.87 cents a lb. Total futures market volume rose by 1,398 to 26,009 lots. Data showed total open interest fell 662 to 234,326 contracts in the previous session. Speculators trimmed their net long position in cotton by 823 lots to 80,971 lots in the week ended July 26, US government data showed on Friday. That was down from their biggest bullish stance in over eight years.