Tuesday, February 7th, 2023
Home »Cotton and Textiles » World » Cotton futures dip, off three-year lows on planting woes
Cotton prices settled lower on Wednesday as traders watched US-China trade talks closely, but came off three-year lows hit in the previous session, after unfavourable weather conditions raised concerns of delay in planting. The most-active cotton contract on ICE Futures US July settled down 0.41 cent, or 0.61%, at 66.35 cents per lb. It traded within a range of 65.79 and 67.27 cents a lb. The front-month contract fell to its lowest since early July 2016 on Tuesday, but regained some ground before settling higher.

However, cotton participants are awaiting further cues from trade negotiations between the United States and China.

"Cotton will keep coming lower until there is an agreement. You may find some common ground at 65 cents or 60 cents or other psychological support levels," said Jon Marcus, president of the Lakefront Futures and Options brokerage in Chicago.

"Cotton was hit the hardest out of all the (beans, corn) markets," Marcus said, adding that delayed planting, however, has helped lift prices from lows hit earlier this week.

Monday's crop progress report from the US Department of Agriculture (USDA) said the US cotton crop was 26% planted, below the 5-year average of 32%.

"There is no end in sight for this wet weather. ... Farmers have to wait it out. If it gets planted late, it takes many days off the gestation period."

Meanwhile, US Treasury Secretary Steven Mnuchin said he will likely travel to China soon to continue talks.

The US Department of Agriculture (USDA) has to date paid out $8.52 billion in direct payments to American farmers, designed to offset losses from trade tariffs by China and other trading partners.

Total futures market volume fell by 23,865 to 26,977 lots. Data showed total open interest fell 4,631 to 214,702 contracts in the previous session. Certificated cotton stocks deliverable as of May 14 totalled 84,854 480-lb bales, down from 87,530 in the previous session.

Copyright Reuters, 2019


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