Cotton futures fall one percent on weaker export sales data
ICE cotton futures fell over one percent on Thursday after weak export sales data, adding to worries over demand for the natural fiber, which has already been hurt by a drawn-out trade war between the United States and China. Cotton contracts for December fell 0.85 cent, or 1.42%, to 59.09 cents per lb at 1 pm EDT (1700 GMT). "It's kind of a sluggish day for agriculture markets. The main thing for cotton was poor sales compared to (the) last several weeks," said Rogers Varner, president of Varner Brokerage in Cleveland, Mississippi.
"Demand backs off over 60 cents. The world crop is good and the US crop is good. The only place it has a small problem is West Texas (due to heat). That area may be experiencing a medium yield rather than a good one." Traders were hoping for a pickup in sales after a strong sales report last week. However, the weekly US Department of Agriculture export sales report showed sales nearly halved from last week. The report showed net sales of 164,000 running bales (RB) for the 2019-2020 marketing year, primarily for Indonesia and Vietnam.
Cotton has fallen over 19% so far this year as a trade war has strained ties between the United States and China, hurting demand for the natural fiber. China is the world's top consumer of cotton, while the United States is one of the biggest producers. Investors had piled up record short positions in cotton due to lack of demand and on expectations of higher supplies. Total futures market volume fell by 7,749 to 11,595 lots. Data showed total open interest gained 2,308 to 215,953 contracts in the previous session.