Cotton futures scale 2 – week peak on possible U.S. – China trade deal
ICE cotton futures on Thursday jumped more than 2 percent to hit their highest level in two-weeks on a report about a potential breakthrough in the U.S.-China trade dispute.
The most active cotton contract on ICE Futures U.S., the May contract , settled up 1.85 cent, or 2.56 percent, at 74.01 cents per lb.
The contract earlier in the session touched 74.35 cents per lb, a level last seen on Feb. 7.
"Prices are up on the news that China as a part of the trade deal has committed to buy $30 billion of U.S. agriculture goods, and there are all sort of hopes that the cotton will be included," said Jack Scoville, vice president at Price Futures Group in Chicago.
"This (latest news on trade talks) is potentially a game changer, the mere fact that it could happen is enough to create significant speculative buying," Scoville said.
The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war.
This comes after a report that China is expected to propose spending $30 billion more on U.S. agricultural imports.
Meanwhile, the U.S. Department of Agriculture projected 2019 U.S. all-cotton plantings at 14.3 mln acres, which analysts said was lower than what the market expected.
Friday is the first notice day for the March contract.
Total futures market volume rose by 13,818 to 47,252 lots. Data showed total open interest fell 6,618 to 223,795 contracts in the previous session. Certificated cotton stocks deliverable as of Feb. 20 totaled 127,973 480-lb bales, down from 129,104 in the previous session.