It traded within a range of 59.07 and 60.25 cents a lb. "Prices are falling because the sentiment of the market is still bearish. We don't have a trade deal," said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia. "Volume is very low, so there is a lot of disinterest, and people are waiting to see what happens to the trade situation in September," Brown said.
US President Donald Trump was less optimistic than his aides about striking a trade deal with China, saying that while he believed China was ready to come to an agreement, he is not ready to make a deal yet. Cotton has fallen more than 19% so far this year as the prolonged US-China trade war hurt demand for the natural fibre. China is the world's top consumer of cotton, while the United States one of the biggest producers.
"We are also waiting on the crop progress report to come out this afternoon. We will see if there is more damage to the Texas crop," Brown added. The US Department of Agriculture's (USDA) US crop condition report is expected to come out at 4 pm EDT on Monday. The contract had touched a 3-1/2-year low on Aug. 5 due to fears of increasing trade tensions between the United States and China.
"ICE December cotton remains under pressure and very close to key support offered by 57.05-56.91 range," Commerzbank technical analysts said in a note "Rallies will find initial resistance at 61.66, the mid July low ahead of the 3 month downtrend at 62.02, while capped here the negative trend will stay entrenched," the note said. Total futures market volume fell by 8,165 to 9,931 lots. Data showed total open interest fell 438 to 214,828 contracts in the previous session. Speculators trimmed their net short position in cotton by 2,865 lots to 49,596 lots, in the week to Aug. 13, data from the US Commodity Futures Trading Commission showed on Friday.