Cotton set for worst day since October on dollar rebound
2022.11.15 02:56
© Reuters. FILE PHOTO: Cotton is picked on Lawrence Smith’s farm in Florence, Alabama October 23, 2015. REUTERS/Brian Snyder/File Photo
(Reuters) – ICE (NYSE:) cotton futures fell as much as 3.5% on Monday, and were set for their biggest drop in eleven sessions, as a bounce-back in the U.S. dollar dented overseas demand for the natural fiber.
* The most-active cotton contract for March fell 2.68 cents, or 3.1%, to 83.65 cents per lb at 12:50 ET (17:50 GMT) after shedding as much as 3.5% to 83.33 cents a lb, which could be its worst day since Oct. 28.
* “I don’t see a whole lot that would move this market other than technical factors and the dollar,” said Jon Marcus, president of Lakefront Futures and Options brokerage in Chicago, who saw 86.50 cents per lb as “a spot that’s been troublesome for cotton.”
* “If the dollar breaks, that might give the buyers a little bit of courage in here but… cotton at 80 cents and above is a pretty good level historically.”
* The rose 0.6%, making U.S. cotton more expensive for holders of other currencies.
* Also weighing on sentiment, Wall Street’s main indexes slipped as hawkish comments from a U.S. Federal Reserve official tempered hopes of the central bank toning down its aggressive monetary policy approach.
* “What you’re going to see the next couple of days, especially this week… cotton will probably be the other side of the coin, depending on what the dollar does, and we’ll take it from there,” Marcus said.
* Chicago corn, wheat and soybeans edged lower, curbed by a rebound in the dollar and renewed doubts about Chinese demand.
