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ICE Cotton Ends With Triple Digit Gains; Marks 4th Consecutive Weekly Decline

4 Apr 2020 8:45 am
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Mumbai (Commodities Control) – Surge in crude oil prices help ICE Cotton futures close 96 to 122 points higher on Friday. However, cotton was 31 points lower on weekly basis.

Cotton contract for May settled up 99 points or 2%, at 50.98 cents per lb. after recovering from 11-year lows on Thursday. It traded within a range of 49.67 and 51.14 cents a lb. July Cotton closed at 50.98 cents, up 122 points. October Cotton closed at 52.06 cents, up 104 points and December Cotton closed at 52.08 cents, up 96 points.

This past week witnessed bearish planting intentions for 2020 from USDA, which forced a limit down and better than expected export sales number that allowed prices to recover to some extent.

The weekly exports sales data by the United States Department of Agriculture on Thursday showed exports of 400,800 Running Bales (RB), with 71,800 RB to China and 92,400 RB to Vietnam.

Oil prices surged for a second day, after U.S. President Donald Trump said Russia and Saudi Arabia will negotiate to end a price war, raising hopes for a new supply deal.

Meanwhile the U.S. economy shed 701,000 jobs in March, ending a historic 113 straight months of employment growth as stringent measures to control the novel coronavirus outbreak shuttered businesses and factories, confirming recession is underway.

Intercontinental Exchange on Thursday said the daily price limit for all Cotton No. 2 futures will be reverted to 3 cents per pound (300 points) above and below the prior day's settlement price.

Total futures market volume fell by 15,623 to 37,235 lots. Data showed total open interest fell 3,266 to 195,507 contracts in the previous session.

Experts aren’t too optimistic about the upside potential as demand destruction and supply chain disruptions will limit any gains.

Support and Resistance for Cotton #2 lies at 49.13 cents and 52.07 cents per lb, respectively.

(Commodities Control Bureau)

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