Mumbai, 5 Oct (Commoditiescontrol): ICE cotton futures rebounded on Friday, supported by the resolution of a major port strike that had disrupted trade across the U.S. East and Gulf Coasts.
The December cotton contract rose 0.54 cents, closing at 73.27 cents per pound, with March and May contracts also firming at 75.28 and 76.52 cents per pound, respectively. The December contract posted a weekly gain of 55 points.
The boost came as U.S. ports reopened following a tentative wage deal between dockworkers and port operators, ending the industry's largest work stoppage in nearly 50 years. However, clearing the significant backlog of cargo may take time.
In addition to the port deal, higher oil prices contributed to the positive sentiment. Crude oil futures rose by $0.83 per barrel as the market awaited Israel’s response to a ballistic missile attack from Iran earlier in the week. However, the cotton rally was partially limited by a stronger dollar, which surged 490 points after a better-than-expected U.S. jobs report, making exports more expensive.
Commitment of Traders data revealed a net short position of 12,147 contracts as of October 1, a reduction of 5,402 contracts over the week. Meanwhile, export sales data showed total commitments at 5.055 million running bales, down 13% from the same time last year and representing 46% of the USDA's export forecast, behind the average pace of 58%.
On Thursday, online cash sales for 684 cotton bales averaged 74.59 cents per pound, according to The Seam. ICE cotton stocks remained unchanged at 265 certified bales on October 2. The Cotlook A Index rose 25 points to 85.10 cents per pound on October 3, while the USDA Adjusted World Price (AWP) was lowered by 25 points to 60.81 cents per pound, effective through the following week.
Market participants are now watching key support levels for December cotton at 72.48 and 71.70 cents, with resistance levels at 73.70 and 74.14 cents per pound.
(By Commoditiescontrol Bureau: 09820130172)
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