On Thursday, cotton futures dropped to a more than two-week low on speculator sales towards the end of the month and the US Department of Agriculture’s mixed export sales survey (USDA).
For March, the cotton contract dropped by 0.49 percent, or 0.6 percent, to 80.35 cents per lb by 1:01 p.m. EST (1801 GMT), having previously hit its lowest since Jan. 11.
“We are approaching the end of the month and are seeing some profit taking from the speculators. Export numbers were good but not great … Shipments are more important than sales as once cotton is shipped it never comes back.”- said Keith Brown, principal
of Keith Brown and Co cotton brokers in Georgia.
The USDA showed in its weekly export sales report that net sales of 322,700 running bales (RB) for 2020/2021 were up 10% from the previous week, while RB 275,300 exports were down 15%.
The dollar was down 0.2 percent against main rivals, restricting any decline in cotton prices.
Investors were also paying close attention to the $1.9 trillion stimulus bill from the Biden administration, which was facing opposition over the scale of the package by Republicans and some Democrats.
Next week, the US Senate and House of Representatives will begin moving forward on President Joe Biden’s proposal to bring a fresh injection of relief, top Democrats said, to Americans and businesses suffering from the pandemic.Brown added, “Both markets have priced in to some extent that they would pass a huge stimulus bill, but markets are just beginning to understand that it might not be as high.”
Total market volume for futures grew by 14 to 33,765 lots. As of Jan. 27, certified cotton stocks available amounted to 78,197 480- lb bales, up from 77,059 in the previous session.
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