ICE cotton futures fell more than 1% to touch new three-year lows on
Thursday, hurt by weak export sales data and stronger crop conditions in
major growing regions in the United States. The most-active cotton
contract on ICE Futures US, the second-month December contract settled
down 0.78 cent, or 1.25%, at 61.71 cents per lb. Prices for the second
month contract touched 61.66 cents, its lowest since May 2016, earlier
in the session.
"The exports sales data was not good. We should
have sold more cotton at a cheaper price and we are not doing that, so
that says something about the demand for cotton," said Keith Brown,
principal at cotton brokers Keith Brown and Co in Moultrie, Georgia.
"Cotton is dealing with the same old affliction which is no trade deal
with China. The US crop is looking measurably better and the trend of
the market is down which is self feeding," Brown added.
Weekly
export sales data from the US Department of Agriculture showed net sales
of 54,000 running bales (RB) for 2018/19 were up 1% from the previous
week and 46% from the prior 4-week average for the week ending July 11.
Exports of 310,300 RB were down 7% from the previous week and 6% from
the prior 4-week average for the same period. Lack of demand and the
long-drawn trade dispute between the United States and China has pushed
cotton prices down over 16% so far this year.
US and Chinese
officials are set to speak on Thursday, potentially paving the way for
in-person trade talks, US Treasury Secretary Steven Mnuchin said. Total
futures market volume rose by 2,719 to 18,573 lots. Data showed total
open interest gained 1,855 to 192,967 contracts in the previous session.
Certificated cotton stocks deliverable as of July 16 totaled 49,935
480-lb bales, down from 57,016 in the previous session.
Source: Business Recorder, Pakistan Friday, 19 July 2019