Cotton futures rise on weaker dollar, WASDE data awaited
Cotton prices rose on Monday, helped by a weaker dollar and as some investors covered their short positions before the government’s monthly demand and supply crop report due on Thursday.Cotton contracts for December rose 0.27 cent, or 0.46%, to 58.85 cents per lb at 1:00 pm EDT (1700 GMT). It traded within a range of 58.23 and 59.09 cents a lb.
“A weaker dollar is probably helping cotton a little bit this morning,” said Jim Nunn, owner of Tennessee cotton brokerage Nunn Cotton, adding that positive news about the US-China trade dispute is keeping prices from slipping further.
The dollar index was down 0.2%. A weaker greenback makes commodities priced in dollars, such as cotton, cheaper for holders of other currencies.
Last week, China and the United States agreed to hold high-level talks in early October in Washington, cheering investors hoping for a trade war thaw as new US tariffs on Chinese consumer goods chip away at global growth.
However, demand concerns continue to plague the market, Tennessee cotton brokerage’s Nunn said.
Prices for the natural fiber have fallen about 20% so far this year due to a protracted trade war between one of world’s biggest exporter of cotton, the United States, and China – the largest consumer.
Meanwhile, the US Department of Agriculture’s (USDA) monthly World Agriculture Supply and Demand Estimates (WASDE) report is due on Thursday.
“People are getting their positions evened before the (monthly Supply and Demand) report comes out,” said Sid Love, commodity trading adviser at Kansas-based Sid Love Consulting.
Total futures market volume fell by 13,848 to 10,783 lots. Data showed total open interest gained 959 to 227,008 contracts in the previous session.