Cotton futures moderately gain ahead of WASDE, US-China talks
Cotton inched up on Friday, after reaching a three-week high in the last session, on concerns about weather in Texas, a major US growing state, while the market awaited the Sino-US trade talks and a federal crop report. The most active cotton contract on ICE Futures US, the second-month December futures, was up 0.1 cent, or 0.2%, at 61.70 cents per lb as of 2:16 p.m. EDT (1816 GMT).
“The market is pretty heavily short but you are seeing some balancing of positions as there is a little bit of anxiety about weather in Texas,” said Jordan Lea, senior trader at DECA Global. Prices are on track for a second straight weekly gain, having risen as much as 2.6% to 62.91 cents in the previous session, the highest since Sept. 13.
“We are just treading water as it is the end of the week and I don’t think anybody wanted to make any bets,” said Jobe Moss, a broker with MCM Inc in Lubbock, Texas. “We got a crop report coming out next week and we got meetings in Washington with China on the trade deal and I think there is just little apprehensiveness.”
The US Department of Agriculture (USDA) is scheduled to release its World Agriculture Supply and Demand Estimates (WASDE) report on Oct. 10. The United States and China trade talks are scheduled next week, which will include deputy-level meetings on Monday and Tuesday and ministerial-level meetings on Thursday and Friday.
White House economic adviser Larry Kudlow said the US team was “open-minded” about the outcome of US-China trade talks. The United States is one of the world’s biggest producers of the natural fiber, while China is the largest consumer. The second-month contract fell about 7% in the previous year and is down about 16% so far this year, predominantly on the protracted tit-for-tat tariff war between the world’s two largest economies. Total futures market volume fell by 21,873 to 17,070 lots. Data showed total open interest fell 907 to 235,494 contracts in the previous session.