October 16, 2013
Cotton futures edged up on Monday, buoyed by a softer dollar and climbing financial markets to a second straight session of slight gains. The most-active December cotton contract on ICE Futures US closed up 0.24 cent, or 0.3 percent, at 83.61 cents a lb. A weakening US dollar set cotton on a crawling recovery from last week’s slide that was seen on large losses early in the week.
The softer dollar lends support as it makes the dollar-traded commodity less expensive to holders of other currencies. “It is steady because the US dollar is down, which is keeping our prices cheaper,” said John Flanagan of Flanagan Trading Corp in North Carolina. Financial markets edged up on as hopes grew that US policymakers would reach an agreement that would bring an end to a partial government shutdown. Cotton also found support from climbing grains markets, which gained due to rains delays to the US Midwest harvest. The US government shutdown, heading into its third week, has denied traders access to crucial government statistics and forced farmers to turn to commercial lending in the absence of $3 billion worth of federal loans.
A weekly US crop progress report due on Monday was notably absent for another week and the US Department of Agriculture did not publish its monthly supply and demand report that was due on Friday. The lack of information has kept trading volumes light in recent sessions. “People are not willing to make big bets under uncertainty,” said Jobe Moss, a broker with MCM Inc in Lubbock, Texas.
The December contract on ICE Futures US traded at a discount of 0.95 cent a lb to the March, widening from 0.85 cent a lb on Friday and a premium of 0.05 cent the previous week, as exchange stocks climbed. The rising ICE inventories have eased traders’ worry over tight nearby supplies in the United States, even as they have stoked concern over cancelled orders and faltering demand. Courtesy: Reuters
Published in ZaraiMedia.com