The front-month contract slipped to its lowest since Nov. 20, 2017 at 70.30 cents. "The supply/demand report that came out on Friday was decidedly negative and the dollar is up to new highs, so cotton has got two heavy forces against it today," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
The dollar jumped on Monday as concerns grew that the latest round of US-China talks may not yield a deal between the world's largest economies before the March deadline. The dollar index was up 0.5 percent. A stronger greenback makes commodities priced in dollar, such as cotton, more expensive for holders of other currencies.
The United States and China are trying to hammer out a deal before the March 1 deadline when US tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent. Meanwhile, China's 2018/19 cotton output was seen at 6.04 million tonnes, up from a previous forecast of 5.94 million tonnes, the Ministry of Agriculture and Rural Affairs said in its monthly crop report.
Total futures market volume rose by 29,572 to 76,769 lots. Data showed total open interest fell 9,015 to 245,353 contracts in the previous session. Certificated cotton stocks deliverable as of Feb. 8 totalled 127,446 480-lb bales, unchanged from 127,446 in the previous session.