ICE cotton futures on Thursday scaled a near 1-1/2-month peak and lodged their best month since July 2016 on resumption in purchases from China and expectations of a further pickup in demand as economies slowly start to reopen.
The cotton contract for July settled up 0.21 cent, or 0.4%, at 57.33 cents per lb. Prices had earlier risen as much as 1.
5% to hit their highest since March 18 at 57.98 cents a lb. For the month, the contract jumped 12.6%, registering its first monthly gain this year and the best in nearly four years.
“Today seem to have been a ‘buy the rumor – sell the fact’ day in regards to Chinese purchases in the export sales report,” said Peter Egli, Director of Risk Management at British Merchant Plexus Cotton.
“We’ve heard of these purchases for the last two weeks and this is why the market rose several cents, but now that the news is out, there seems to be no incentive to push prices higher.
” The weekly export sales data showed net sales of 434,800 running bales (RB) for 2019/20, up noticeably from the previous week, while exports of 253,700 RB were down 5% for the week ended April 23.
The report showed sales to China of 422,400 RB for 2019/20 and 115,300 RB for 2020/21. Traders were expecting those sales following news that the country was planning to buy for its strategic reserves
