Mumbai, 11 Sep (Commoditiescontrol): ICE cotton futures climbed on Tuesday, driven by concerns over Tropical Storm Francine, which threatens key cotton-growing regions in the U.S. Gulf Coast.
The December cotton contract increased by 0.52 cents, closing at 68.21 cents per pound. March and May contracts also settled higher at 69.84 cents and 71.13 cents per pound, respectively.
The rise in prices is also attributed to bargain buying, as cotton had posted losses for two consecutive weeks. Over the past week, the December contract dropped 3%, despite breaking a four-month losing streak in August with a 1.5% gain, partly due to weather worries. However, investor sentiment remains fragile as markets await U.S. inflation data, with last Friday's mixed payrolls report reinforcing expectations of a modest interest rate cut by the Federal Reserve.
A stronger U.S. dollar, which rose by 122 points, put additional pressure on cotton prices by making U.S. exports more expensive. Crude oil futures also fell by $2.39 per barrel, further affecting market sentiment.
Despite these bearish factors, weather conditions are becoming more supportive for cotton prices. Traders are closely watching Tropical Storm Francine, which is forecast to strengthen into a Category 2 hurricane and make landfall along the Louisiana coast. This storm could impact cotton production in key states like Texas and Georgia, where crop condition ratings have recently worsened.
On the trade front, U.S. cotton export sales remain slow, reaching only 38% of the USDA's annual forecast, below the typical pace. However, strong sales to Pakistan and India were reported. Export commitments for 2024/25 are down 12% from last year, covering just 41% of the USDA’s target.
As traders monitor support levels for the December contract, set between 67.67 and 69.21 cents per pound, uncertainty over weather, demand, and geopolitical factors continues to weigh on the market.
(By Commoditiescontrol Bureau: 09820130172)
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