Thursday, 12 March 2015 01:55
NEW YORK: Cotton on ICE Futures U.S. fell for a 10th straight session on Wednesday, extending its longest losing streak since November 2013 under pressure from speculator liquidation and weak demand in the cash market.
The front-month May cotton contract on ICE hit a five-week low of 60.28 cents a lb before closing down 0.54 cents, or 0.9 percent, at 60.33 cents.
Speculators have begun unwinding a bullish bet in fiber due to technical weakness and lackluster demand, traders said. They had boosted it for five weeks, the most recent government data showed last week.
The U.S. Department of Agriculture (USDA) on Tuesday raised its forecast for world inventories to balloon to a record of over 110 million 480-lb bales, as it lowered its outlook for appetite in China, the world’s largest consumer.
A strong greenback weighed as the U.S. dollar extended a rally to a near 12-year high against a basket of other major currencies.
“As long as the dollar is screaming (higher), everyone else is crying,” said Ron Lawson, a partner at commodity investment firm Logic Advisors in Sonoma, California, noting that prices must decline for business to pick up.
The front-month has fallen 11 percent from February highs, weighed down as cancellations by China and other major buyers have sparked demand worries.
Copyright Reuters, 2015
