Cotton set for best week in over 2 – months on strong export sales data
ICE cotton futures rose 3% on Friday and were headed for their best week in more than two months, supported by strong U.S. export numbers and on hopes of an uptick in demand from top consumer China.
The cotton contract for March rose 2.26 cents, or about 2.7%, to 85.65 cents per lb by 11:06 ET (1606 GMT). It traded in a range of 83.57 cents to 85.84 cents a lb. The contract gained about 3.9% so far this week.
"It's not surprising that we're selling; China's reopening is going to happen faster than people would feel comfortable with," said Louis Barbera, partner and analyst at VLM Commodities Ltd.
"Not sure if we're going to have these types of export reports for the next couple of weeks in a row. We could have another decent one next week, but one thing is for sure, the worst is over."
The U.S. Department of Agriculture's weekly export sales reported net sales of 209,400 running bales (RB) of cotton for 2022/2023, up from the last week and the prior 4-week average.
Oil headed for a second weekly gain due to brightening economic prospects for China and expectations of a boost to fuel demand in the world's second-biggest economy.
Higher oil prices make polyester, a cotton substitute, more expensive.
Polyester's demand is expected to improve with upcoming wedding season in domestic market and shift in China's zero COVID policy.
China will resume overseas tours organized by tour agencies and online travel companies for Chinese citizens.