Mumbai (Commodities Control) - ICE cotton futures plunged as much as 5.2% to an 11-year low on Wednesday, as sentiments soured on dire predictions for the U.S. death toll from the coronavirus and as risks from the pandemic showed little sign of easing.
The market went sharply lower on Wednesday on fears of cancelations on Thursday’s exports-sales data, plus farmer fixation liquidation.
Wednesday trading in the cotton futures market lowered prices another 268 to 300 points. May Cotton settled at 48.41cents, down 272 points. The contract fell to 48.45 cents per lb earlier in the session, a level last seen in April 2009.
July Cotton is at 48.22 cents, down 268 points. October Cotton ended at 50.31 cents, down 290 points and December Cotton closed at 50.41 cents, down 300 points.
President Donald Trump warned Americans on Tuesday of a "painful" two weeks ahead in fighting the coronavirus, with a mounting U.S. death toll that could stretch into the hundreds of thousands even with strict social distancing measures.
Meanwhile, data on Wednesday showed new orders for U.S.-made goods plunged to an 11-year low, while private payrolls fell for the first time since 2017, weighing on Wall Street.
"ICE futures should experience resistance near 57–58, 59-60 and then near 65, basis May, over the near- to medium-term," Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note. "Relatively strong support likely resides near 48–50."
Total futures market volume fell by 8,723 to 29,068 lots. Data showed total open interest gained 5,124 to 199,435 contracts in the previous session.
Support and Resistance for Cotton #11 lies at 46.44 cents and 52.24 cents/lb, respectively.
(Commodities Control Bureau)