ICE Cotton Fell, Export Data Failed To Boost Trade Hope

ICE cotton futures fell on Friday, trading volume was low, many market participants did not enter the week due to holidays, while active export sales figures failed to boost market expectations for China's increase in cotton purchases. China is the largest cotton consumer in the world.


ICE's most active December cotton fell 0.43 cents, and the settlement price was 66.82 cents per pound.


The transaction interval is 66.43-67.43 cents per pound.


Export sales report released on Friday by the US Department of agriculture (USDA) showed that in the week ending June 27th, the US 2018-19 annual export sales of upland cotton increased by 141 thousand and 500 packets, an increase of 96% over the previous week, a significant increase over the four week average. In the week 2019-20, the US cotton export net sales were 55 thousand and 300 packs.


INTL FCStone BaileyThomen, partner of cotton risk management, said: "due to insufficient market liquidity and low turnover, there has been some sell-off in the cotton market."


It said, "exports are stable and helpful to the market, but before the new news on trade tariffs comes out, it is not enough to push the price out of the current trading range."


After the resumption of trade negotiations between China and the United States, cotton prices rose earlier this week. The United States is one of the largest cotton producers, while China is the No. 1 cotton consumer.


British Plexus Cotton said in a research report, "although the G20 conference has some positive effects, the market rebound is only short-lived."


It said, "the problem is that the market is still in short supply, which requires speculators to provide Buyer liquidity to drive up prices. So far, speculators have no incentive to buy, instead, they have further increased headroom.


Meanwhile, the US dollar index rose by 0.6%, making dollar denominated commodities more expensive for other currency holders.


The ICE futures market closed on Thursday for Independence Day holidays.


As of July 3, 2019, the ICE contract for delivery of cotton futures contract No. 2 was 72254 packs, unchanged from the previous day.