January 12, 2018
NEW YORK: (Reuters) : ICE cotton futures rose over 1.5 percent on Wednesday, buoyed by speculator buying, as prices of the natural fibre crop hovered close to a 3-1/2-year high touched last week. The most active ICE cotton contract for March expiry settled up 1.3 cent, or 1.66 percent, at 79.65 cents per lb. It traded within a range of 78.33 and 79.93 cents a lb.
“Cotton is getting a huge bid today from spec funds,” said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi. “Speculators are adding to their longs ahead of the (weekly) sales report. Over the last two to three months, they have tended to buy a day before the sales report comes out.”
The weekly export sales data from the US Department of Agriculture is due on Thursday. The market is also keeping close track of the USDA’s World Agricultural Supply and Demand Estimates (WASDE) report due on Friday. Cotton futures on Friday breached the key 80-cent level for the first time since June 2014, touching a high of 80.05 cents a lb.
“I think fundamentally we are still in a demand-driven market. Export demand has been good. The specs are still extending their long positions. They are sensing little resistance to the upside,” said Beau Stephenson, merchant at Omnicotton Inc in Texas. “We have the monthly USDA report on Friday. Maybe there are expectations of some bullish news from there.”
Total futures market volume rose by 7,048 to 32,632 lots. Data showed total open interest fell 883 to 285,954 contracts in the previous session. Certificated cotton stocks deliverable as of Jan. 9 totalled 47,942 480-lb bales, up from 47,665 in the last session.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.2 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 0.37 percent.—Reuters (Source: Business Recorder)