Cotton futures settle lower
ICE cotton futures settled lower on Friday, registering the biggest weekly decline since early May 2014 on a bearish world supply and demand report from the US government.
ICE December cotton fell as much as 2.3 percent to a low of 70.20 cents per lb, the lowest for the second-month contract in a month, immediately following the release of the US Department of Agriculture’s (USDA) monthly supply and demand report.
The report showed the US government cut its global demand estimate and raised its forecast for US production and inventories for the 2016-17 crop year.
“US production and enduing stocks were modestly higher than expected and sparked an initial selloff.” said Louis Rose, an independent cotton trader and consultant with Risk Analytics in Memphis.
The report was negative, according to Jobe Moss, a broker with MCM Inc in Lubbock, Texas.
Prices could fall further if bullish investors who were hoping for a positive WASDE report begin to liquidate their positions, Moss added.
The December cotton contract on ICE Futures US settled down 1.21 cents, or 1.68 percent, at 70.65 cents per lb. It traded within a range of 70.2 cents and 72.72 cents a lb.
Total futures market volume rose by 9,502 to 28,148 lots. Data showed total open interest gained 734 to 244,463 contracts in the previous session.
Speculators boosted their net long position in cotton contracts on ICE Futures U.S to an 8-1/2-year high in the week ended Aug. 9, US government data showed on Friday.