ICE cotton futures jump 3pc
May 7, 2021
NEW YORK: (Reuters): ICE cotton futures rose as much as 3% on Thursday to their highest in a week on concerns over lower supplies of the natural fibre crop and a lower dollar. Cotton contracts for July rose 2.56 cents, or 2.93%, to 89.89 cents per lb by 13:08 p.m. EDT (1708 GMT), their highest since April 29.
“This is a culmination of a real supply issue for the current crop, high committed sales and expectations that we’re not going to grow as much cotton as we need for next year,” as key grains are paying better, said Louis Barbera, partner and analyst at VLM Commodities Ltd.
Chicago corn extended a rally on Thursday to a fresh eight-year high as dry weather threatened harvest yields in major exporter Brazil and kept the focus on ebbing global supplies. “A planting rain is what’s needed, we’re going to be looking towards the end of May as the crucial time,” but in key cotton-producing counties that could grow up to a million bales, “it’s not looking good,” Barbera said.
The US Department of Agriculture’s weekly export sales report showed net sales of 63,700 running bales for 2020/2021, down 17% from the previous week and 56% from the prior 4-week average.
Analysts, including Barbera, have said that since they see US cotton stocks falling, the weekly export reports will not be a major near-term factor for the market. The US dollar dipped on Thursday, potentially lifting cotton demand from buyers paying with other currencies. – Reuters
(Source: Business Recorder)