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ICE cotton futures settled lower on Monday, as investors booked profits after prices rose to a near one-week high earlier in the session, while extreme weather conditions in the US Midwest remained in focus. The front-month cotton contract on ICE Futures US, settled down 0.25 cent, or 0.32 percent, at 77.36 cents per lb.

The front-month contract hit 77.88 cents per lb earlier in the session, however, the level last seen on March 26. "The main focus at the moment is on the weather and planting," said Gabriel Crivorot, associate at Societe Generale in New York, adding there was profit-taking. Market participants kept an eye on the weather updates as flooding in the US Midwest threatened to disrupt field work, with the US government's National Oceanic and Atmospheric Administration warning of an "unprecedented flood season" as it forecasts heavy spring rains.

On Friday, prices climbed 2.3 percent, the biggest one-day percentage gain since Feb. 21, after a report from the US Department of Agriculture estimated US cotton plantings for 2019 at 13.8 million acres, less than analysts' average forecast of 14.498 million acres.

The United States and China said they made progress in trade talks that concluded on Friday in Beijing, with Washington saying the negotiations were "candid and constructive" as the world's two largest economies try to resolve their drawn-out trade war.

"The market is cautiously optimistic (on trade talks). Stocks indicate that there is optimism given the progress that has been made, but the market is not currently considering it as close to done," Crivorot said. Total futures market volume rose by 187 to 37,836 lots. Data showed total open interest fell 2,550 to 225,886 contracts in the previous session. Certificated cotton stocks deliverable as of March 29 totaled 34,482 480-lb bales, down from 46,544 in the previous session.

Copyright Reuters, 2019


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