Mumbai, 12 Sep (Commoditiescontrol): ICE cotton futures climbed on Wednesday, driven by supply concerns as traders evaluated the potential damage from Hurricane Francine in key U.S. growing regions.
The December cotton contract gained 1.92 cents, closing at 69.61 cents per pound, while March and May contracts also increased to 71.17 cents and 72.36 cents per pound, respectively.
The recent price surge follows a two-week decline, with bargain buying playing a significant role. Despite a 3% drop in the December contract last week, cotton managed to break a four-month losing streak in August with a 1.5% gain, partly due to ongoing weather concerns. Hurricane Francine, set to make landfall along the Texas-Louisiana border, is expected to cause significant damage to Delta cotton crops, contributing to weather-related price premiums.
However, market sentiment remains cautious ahead of U.S. inflation data, as last Friday's mixed payroll report reinforced expectations for a modest interest rate cut by the Federal Reserve. A stronger U.S. dollar, which gained 112 points, added pressure on cotton by making U.S. exports more expensive, while rising crude oil prices, up by $1.68 per barrel, lent support to natural fibers.
U.S. cotton export sales remain slow, reaching only 38% of the USDA's annual forecast, lagging behind typical levels. Nonetheless, strong demand from Pakistan and India was reported. Export commitments for the 2024/25 season are down 12% from last year, covering only 41% of the USDA’s target.
In other market developments, The Seam reported 1,939 online cash cotton bale sales on Tuesday, with an average price of 65.45 cents per pound. ICE cotton stocks remained unchanged on September 9, at 265 bales. The Cotlook A Index dropped 30 points on September 10, settling at 79.10 cents per pound, while the USDA Adjusted World Price (AWP) rose by 29 points to 57.27 cents per pound.
As traders monitor support levels for the December contract, ranging between 68.50/67.39 and 70.27/70.93 cents per pound, uncertainties surrounding weather, demand, and geopolitical factors continue to influence the cotton market.
(By Commoditiescontrol Bureau: 09820130172)
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