ICE cotton futures hit a two-week peak on Thursday, gaining for a third straight session, boosted by strong export sales data from the US Department of Agriculture, which highlighted high demand from Bangladesh. The most-active cotton contract on ICE Futures US, the second-month December contract, settled up 0.05 cent, or 0.1%, at 59.62 cents per lb. It earlier rose to 60.18 cents a lb, its highest since Aug. 2.
Also Read: Weekly Cotton Review
“The export sales data this morning was big. Sales number from Bangladesh was surprisingly high. Lower prices have increased the appetite for cotton from Bangladesh,” said Jim Nunn, owner of Tennessee cotton brokerage Nunn Cotton.
The weekly USDA export sales report showed net sales of 329,100 running bales (RB) for 2019-2020 marketing year, primarily to Bangladesh and Vietnam.
“Prices have been low for quite some time, but now it has started rising. We have been able to hold the 59 level for the last couple of days and if we manage to close around 60, we might see prices going up to 61 cents per lb,” Nunn added. The contract has gained about 5% since touching a 3-1/2 year low on Aug. 5.
Cotton has fallen about 19% so far this year as prolonged US-China trade war hurt demand for the natural fibre. China is the world’s top consumer of the fibre, while the United States one of the biggest producers. Total futures market volume rose by 788 to 19,533 lots. Data showed total open interest fell 801 to 214,745 contracts in the previous session. Certificated cotton stocks deliverable as of Aug. 14 totalled 23,820 480-lb bales, down from 23,908 in the previous session.
(This news/article originally appeared in Business Recorder on August 16th, 2019)