Dry weather drives ICE cotton to a 4-month high
Earlier this week, ICE (Intercontinental Exchange) cotton futures hit a four-month high due to concerns over crop damage in several key US states. Soon thereafter, it dropped some, with expectations that the July 10 US Department of Agriculture (USDA) monthly supply-demand report would show a decline in cotton production.
Dry weather in states such as Texas, which is a major cotton producer, is said to have contributed to cotton contracts reaching 64.33 cents this week, according to Reuters, which is the highest seen since the first week of March. Sid Love, a commodity trading adviser, said he expected the USDA report to show that US supply and world carryover stocks to be down.
Louis Barbera, a partner and analyst at VLM Commodities, was quoted saying that the continued dry weather in Texas and the breaking of a 200-day average had moved the market higher. At the same time, Reuters pointed out, a surge in coronavirus cases in the states has dampened demand for apparel, which has led cotton to fall about 10% this year.
Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, was quoted as describing the cotton market “on life support with little relief in sight”.
