ICE cotton futures dipped more than 2 percent to a nearly one-month low on Monday on expectations of favorable weather situations in areas creating the natural fiber.
On ICE Futures US July, most-active cotton contract, settled down 1.82 percent, or 2.31 percent, at 77.04 percent per lb.
Mr Gabriel Crivorot, an associate at Societe Generale in New York said, “After weeks of bad weather and expectations that excessive rain would continue to hurt crops, analysts are now expecting the weather in US cotton areas to improve.” Last seen on March 20, rates fell to 76.3 percent per lb. in the session.
Ms Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group said, “Technically cotton is overbought, we are seeing some liquidation.”
US Treasury Secretary Steven Mnuchin raised expectations that an end to the long-drawn trade war between China and the United States was near, saying he hoped trade talks were approaching a final lap.
Mr Crivorot said, “Even if a deal (between China and the United States) was imminent, weather could easily be a more important variable since it directly affects the supply of cotton.”
China is the top cotton consumer while the United States is the world’s biggest cotton exporter.
Total futures market volume fell by 15,434 to 48,120 lots. Data showed total open interest gained 189 to 216,665 contracts in the previous session.
Certificated cotton stocks deliverable as of April 12 totaled 53,421 480-lb bales, up from 52,952 in the previous session.
