ICE cotton futures dropped as much as 3.7% from a three-week peak on Monday as fears of a drag on global consumption in the wake of coronavirus were underpinned by a government export sales report showing a sharp uptick in cancellations.
The cotton contract for May fell 1.65 cent, or 3.03%, at 52.72 cents per lb. by 1:19 p.m. EDT (1719 GMT). It traded within a range of 52.35 and 54.55 cents a lb.
Earlier in the session the contract hit the highest since March 24, at 54.55 cents per lb.
“Today’s move seems to be a delayed reaction to last week’s WASDE and export reports. … Stock market prices are also off significantly today,” said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group.
The United States Department of Agriculture (USDA) cut estimates for global consumption to 110.58 million bales in its monthly World Agriculture Supply and Demand Estimates (WASDE) report released on Thursday.
US exports were also seen at 15 million bales, 1.5 million bales lower than the previous estimate, as per the report.
The agency in a weekly export sales report on Thursday also showed net sales reductions of 5,200 running bales for 2019/2020 which was a marketing-year low, with 101,000 RB from China, one of the biggest consumers of the natural fiber.
Consumption of cotton and textile items is unlikely to be immediately affected by economic stimulus measures as these are discretionary purchases, Rose said, adding that demand will likely only recover by the fourth quarter or 2021 first quarter.
Certificated cotton stocks deliverable as of April 9 totaled 27,255 480-lb bales, unchanged from 27,255 in the previous session.
The US Federal Reserve on Thursday announced a broad, $2.3 trillion effort to bolster local governments and small and mid-sized businesses, the latest in an expanding suite of programs to cushion the impact of the virus.
Further pressuring the cotton market, Wall Street’s main indexes slipped as investors braced for a difficult earnings season as the coronavirus pandemic hammers the economy.
More than 1.8 million people have been reported to be infected by the novel coronavirus globally and 115,242 have died, according to a Reuters tally.
Source: Business Recorder
VIP Clothing has entered a new market segment with the launch of branded handkerchiefs while also expanding its presence within…
Cotecna has officially opened its new Softlines Testing Laboratory in Tirupur. The inauguration was led by Amit Chopra, along with…
Loop Industries has raised €10 mn through a convertible preferred security agreement with Reed Societe Generale Group, an entity under…
OJAS has partnered with Maharishi for a capsule collection in military-inspired aesthetics featuring Maharishi’s Original Snopants, sweatshirt, and a tote…
Red Run has announced its foray into menswear with menswear collection, titled ‘Drop 1,’ featuring 10 essential pieces designed for…
INEOS Styrolution, a global leader in styrenics, has successfully completed its first project involving mechanically recycled polystyrene in yoghurt cups.