15 May 2019
NEW YORK (Reuters): Cotton prices on Tuesday recovered from a near three-year low hit earlier in the session on renewed optimism that a trade war between China and the United States will be resolved and as poor weather delayed planting progress in the United States.
The most-active cotton contract on ICE Futures US July snapped six straights sessions of losses to gain 1.50 cent, or 2.3%, at 66.95 cents per lb as of 2:12 pm EDT (1812 GMT). Earlier in the session, the front-month contract touched 64.50 cents, its lowest since early July 2016.
“The stock market is up, US President Donald Trump said we’ll have a deal eventually and the weather is less than perfect,” said Jack Scoville, vice president at Price Futures Group in Chicago. “Market is going to keep an eye on planting progress and it has been very slow and that is going to be an issue moving forward.”
Global stocks rebounded on Tuesday from two-month lows after slightly more optimistic comments on the trade deal, from the US and China, improved investors sentiment. The United States is one of the world’s biggest exporters of cotton, while China is the largest consumer. Also supporting prices was Monday’s crop progress report from the US Department of Agriculture (USDA) which said the US cotton crop was 26% planted, below the 5-year average of 32%.
“There is a little bit more optimism today for a trade deal ... it’s just a matter of time,” said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting. “Funds are covering shorts ... looking at the (crop progress) number we got lot of planting to do and the weather is not all that great,” he said, adding cotton is following grain market’s performance. US corn futures rose on Tuesday after unfavourable weather delayed crop planting progress, while soybeans and wheat also gained.
Total futures market volume fell by 20,890 to 45,020 lots. Data showed total open interest fell 1,717 to 219,333 contracts in the previous session. Certificated cotton stocks deliverable as of May 13 totalled 87,530 480-lb bales, up from 87,391 in the previous session.—Reuters
(Source: Business Recorder)