ICE cotton futures slipped on Friday, en route for their worst week in four months, as increased aversion to risk in financial markets spilled into commodities that overshadowed a strong weekly export sales report. Cotton contracts for March fell 0.55 cent, or 0.79 per cent, to 69.48 cents per lb by 1:16 pm. EST (1816 GMT), trading within a range of 69.35 and 70.25 cents per lb.
Prices have fallen nearly 2.5 per cent so far this week, heading for their biggest weekly percentage decline since mid-September.
“We have risk-off (sentiment) across the board today… Cotton market had a tremendous run over a couple of months and some people are taking profits in this environment,” said John Payne, senior bro- ker at Daniels Trading.
Crude oil prices fell along with US stocks amid renewed concerns over the spreading of a coronavirus outbreak from China.
“Markets don’t like uncertainty and until we know what the threat potential of this virus is, traders tend to tread more carefully,” British merchant Plexus Cotton said in a research note.
The US Department of Agriculture in its weekly export sales report showed net sales of 3,07,800 running bales for the 2019/20 marketing year, up 32 per cent from the previous week, for the period ended January 16. Traders and farmers are keeping a close eye on China’s demand following the initial trade deal between the United States and China last week.
Cotton prices have risen about 25 per cent since they touched a more than three-year low in late August last year on anticipation of China buying more US agricultural goods as part the trade deal.
Source: Economic Times
