Cotton dips over 1 percent, heading for fifth weekly fall on trade war concerns
Cotton prices fell over 1% on Friday, and were headed for their fifth straight weekly fall, with investors concerned about the effects of the China-US trade conflict as the two sides appeared far from reaching a resolution. The most-active cotton contract on ICE Futures US, July, fell 0.96 cent, or 1.44%, at 65.84 cents per lb at 2:19 pm EDT (1819 GMT).
It traded within a range of 65.83 and 66.80 cents a lb. The July contract was down about 3.8% so far this week, and was on track for its fifth consecutive weekly decline. "The trade dispute between United States and China is a wet blanket on all of our contracts right now," said Barry Bean, a cotton buyer based in Gideon, Missouri.
Following Washington's blacklisting of Chinese telecoms equipment maker Huawei Technologies, Beijing said the United States must show sincerity if it is to hold meaningful trade talks. Escalating trade tensions had pushed the contract to its lowest level in three years earlier in the week.
"The market is consolidating around the 66 to 67 cents range and is probably establishing a new (trading) range," said Bean, adding there was some profit-taking. Total futures market volume fell by 2,267 to 21,589 lots. Data showed total open interest gained 1,434 to 217,265 contracts in the previous session. Certificated cotton stocks deliverable as of May 16 totalled 81,946 480-lb bales, unchanged from 81,946 in the previous session.