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ICE Cotton Marks Second Consecutive Weekly Gain as Rains Delay Harvest

26 Sep 2020 8:52 am
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Mumbai (Commodities Control) – ICE cotton futures rose on Friday, posting second straight weekly gain as wetter weather in major crop-producing areas in the United States delayed the ongoing harvest. For December, the week ended up with 29 points.

Cotton contracts for December were up 0.38 cent, or 0.6%, to 65.84 cents per lb at 12:42 p.m. EDT (1642 GMT). The contract has risen more than 0.2% this week. December Cotton closed at 65.95 cents, up 49 points on Friday. October Cotton closed at 64.66 cents, up 69 points. March 21 Cotton closed at 66.66, up 41 points and May 21 Cotton closed at 67.35, up 36 points.

Rainfall totals of 1 to 3 inches are expected through Friday from the Southern Appalachians into the Piedmont area of South and North Carolina due to post-tropical cyclone Beta, located near Birmingham, Alabama, the National Hurricane Center said.

On the technical front, "the market seems to be happy at around 65.00 and it will take some new momentum to move it through strong overhead resistance or scale-down support," British merchant Plexus Cotton said in a note on Thursday.

The financial markets are expected to become increasingly nervous ahead of the Nov. 3 U.S. elections and there is a potential for a risk-off move and deeper correction amid lack of a new stimulus measure.

However, revived hopes for a stimulus bill out of Washington boosted equities and spending ideas.

Limiting cotton's advance, the dollar scaled a two-month peak and was on track for its biggest weekly gain since early April.

Total futures market volume fell by 13,471 to 10,717 lots. Data showed total open interest fell 993 to 220,401 contracts in the previous session.

Experts however believe that the cotton market ended Friday slightly higher as traders continue to pin their price hopes on a Chinese deal. Overnight, there was news of a very positive phone meeting between U.S. and Chinese negotiators. The results of that call indicated the two sides were very close to a phase one agreement.

The weekly CoT update had Cotton speculative traders 1,483 contracts more net long, at 51,311 as of 22nd September. New buying was noted as managed money open interest increased 3,349 contracts wk/wk.

Support and resistance for cotton #2 lies at 65.34 cents and 66.37 cents per lb, respectively.



       
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