Wednesday, 11 March 2015 02:26
NEW YORK: ICE May cotton extended earlier losses and hit a more than one-month low after the U.S. government raised its forecast for global inventories at the end of the 2014/15 crop year in its monthly report on Tuesday.
The most active May cotton contract on ICE Futures U.S. was down 1.06 cents, or 1.7 percent, at 61.19 cents a lb by 12:30 p.m. EST (1630 GMT), the session low and the lowest level for the May contract since Feb. 6.
The U.S. Department of Agriculture (USDA) raised its forecast for world cotton stocks on July 31, the end of the crop year, to 110.06 million 480-pound bales, up from 109.84 million bales in its February report.
This was in part due to a decrease in the USDA’s outlook for domestic use in top-consumer China to 35 million bales, down from 35.5 million bales in February.
The drop came as yarn imports continue to rise, displacing domestic cotton spinning, the USDA said, though it noted that the lower Chinese consumption was partially offset by greater consumption elsewhere in Asia.
“The USDA numbers are slightly negative, but with cotton futures down several cents the past three weeks, market action may already reflect today’s changes,” Sharon Johnson, introducing broker for Wedbush Securities in Atlanta, wrote in a note following the report’s release.
Copyright Reuters, 2015
