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Dec 19 (Reuters) – ICE cotton futures jumped more than 3% to their highest in nearly two weeks on Monday, tracking gains in the oil market as the U.S. dollar retreated.
* The cotton contract for March CTH3 rose 3.44 cents, or 4.2%, at 85.36 cents per lb, by 11:48 ET (16:48 GMT), earlier hitting its highest since Dec. 6.
* Outside markets are supporting cotton here as “the dollar is little weak while crude oil is a little firmer,” said Jack Scoville, vice president at Chicago-based Price Futures Group.
* The dollar was down, making U.S. cotton more appealing among holders of other currencies. USD/
* Oil rebounded on Monday on optimism over the Chinese economy and a recovery in fuel demand. Higher oil prices make polyester, a substitute for cotton, more expensive.O/R
* Considering the overall cotton demand picture “not only China but the rest of Southeast Asia, really starts to ramp up… then we could see quite a recovery indeed,” Scoville added.
* Meanwhile, Chicago soybean and corn futures slid as worries over a global economic downturn weighed on prices. GRA/
* Total futures market volume fell by 5,675 to 15,263 lots. Data showed total open interest fell 496 to 199,515 contracts in the previous session.
* Data last week showed that speculators increased their net short position in ICE cotton by 3,524 contracts to 17,862 in week to Dec. 13.
(Reporting by Rahul Paswan in Bengaluru;)
((RahulKumar.Paswan@thomsonreuters.com; If within U.S. +1 646 223 8780;;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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