|
| Your Current Position >> Morning Express
|
|
DJ ICE Cotton Review: Higher; Weak Dollar Fuels Buying
Author： CCFGroup.com Time：Nov 19 2009 8:46AM
U.S. cotton futures rose Wednesday, though prices ended off their strongest levels of the session, as the U.S. dollar fell against major world currencies but recouped some of its losses later in the day.
Most active December cotton added 65 points to settle at 68.54 cents per pound, near the middle of the day's trading range.
Once again, the market was held captive to the dollar, as renewed weakness in the greenback sparked speculative fund buying in most commodity markets,brokers said.
Delta cotton farmers are seeing improving harvest conditions, which are expected to last through Sunday before another storm system moves in on Monday and Tuesday, according to DTN Meteorlogix.
Producers are trying to get as much picked before rains affect the region once again. So far, 60% of the U.S. cotton crop has been harvested, down slightly from the five-year average pace of 68% complete.
Questions over the actual size of the crop along with quality issues due to the wet weather are underlying supportive features for cotton, said Sid Love,analyst at Kropf & Love Consulting in Overland Park, Kan.
"You've got to think that the final crop could be less than [the 12.5 million bales currently estimated by the U.S. Agriculture Department,]" said Love.
"We won't know precisely what the crop is until we get to the spring and we see the ginnings," he said, adding that producers Mississippi, Louisiana and Arkansas still have a ways to go before finishing the harvest.
Mostly favorable weather conditions are expected for the rest of this week in West Texas.
Speculators shed 11,895 longs and 12,033 shorts from ICE cotton futures in the week ended Nov. 13, leaving their overall net long position at 35,183 contracts, nearly unchanged from the 35,045 net long position held the previous
week, ICE's speculation and hedging report showed.
The reduction of both longs and shorts came on increased volatility, as cotton futures hit 13-month highs last week then almost immediately fell to one-month lows in reaction to gyrations in the dollar and its effect on the commodity sector.
A potential merger between Allenberg Cotton Co, a division of the Louis Dreyfus Group, and cotton companyDunavantEnterprises Inc. is still awaiting antitrust approval, the heads of the firms said Wednesday.
Brazil's Cotton Producers Association warned Wednesday the country may need to import cotton between January and June due to an expected deficit on the heels of a smaller crop. Planted area for the 2009-10 crop is expected to be from 5.5% to 8% smaller than the one in 2008-09, private consultancy Safras &
Mercado said recently.
Certificated U.S. cotton stocks rose 3,777 500-pound bales to total 428,039 bales. The U.S. Agriculture Department said that 32,296 bales awaited review and 6,061 had be decertified.
Open interest fell 356 to total 170,527 contracts,ICE reported.
Futures volume is pegged at 23,379 contracts, with 15,092 calls and 6,526 put options traded.
ICE Close Change Range
Dec 68.54 +65 67.81-69.18
Mar 72.55 +58 71.78-73.39
Source:DOW JONES
|
|
|
|
