ICE Cotton Update
ICE cotton futures post best quarter since March 2011
ICE cotton futures jumped more than 3.5% on Thursday and registered their best quarterly performance since March 2011, supported by strong export sales and worries over crop damage due to heavy rains in Texas.
The cotton contract for December settled up 3.86 cents, or 3.79%, at 105.8 cents per lb.
The second month cotton futures contract hit its highest level since September 2011, ending the quarter with gains of 23.73%.
"We had super export sales and the vast majority of them were bought by China. That is supporting the market," said Jack Scoville, vice president at Chicago-based Price Futures Group.
"Once cotton took out $1 mark, we're seeing some new buying interest on the part of the speculator. Also there are some showers in major cotton growing areas and that could be a supportive factor as well."
The U.S. Department of Agriculture's weekly export sales report showed net sales of 571,400 running bales for 2021/2022, were up 65% from the previous week and 92% from the prior 4-week average, with increases primarily for China.
Adding to supply crunch concerns, heavy rains brought by cyclone Gulab damaged India's summer-sown crops, such as soybeans, cotton, pulses and vegetables, just before harvesting in key growing regions.
"The market just continues higher, with some thinking $1.50 is a realistic upside target. They may be correct, given issues in China and India," said Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, in a note.
Meanwhile, the dollar index slipped 0.2% against its rivals, making cotton less expensive for other currency holders.
Total futures market volume fell by 14,836 to 44,782 lots. Data showed total open interest gained 5,937 to 289,362 contracts in the previous session.