Cotton Rises on Continued Demand From Overseas Buyers
March 23 2017 - 12:08PM
Dow Jones News
By Carolyn Cui
Cotton rose Thursday after a U.S. government report showed
overseas demand for U.S. fiber remained robust.
Cotton futures for May delivery added 0.2% to 77.50 cents a
pound on the ICE Futures U.S. exchange.
Net export sales of upland cotton, the most commonly grown
variety in the U.S., totaled 328,200 bales in the week ended March
16, up 4% from the prior week, the U.S. Department of Agriculture
said in its weekly export sales report. U.S. exports increased to
Vietnam, Turkey and China.
"The report was tremendous, both in shipments and sales," said
Louis Rose, founder of Rose Commodity Group.
Some market participants were expecting exports to slow down
after weeks of strong sales. As of March 16, total export sales
reached 7.5 million running bales, or 76% higher from the same time
a year earlier.
Cotton futures have been rising on robust demand for U.S. fiber
overseas, fueled by a 45% decline in Brazilian exports this year
after strong sales a year earlier, as well as fears of a trade war
that have resulted in aggressive buying from major cotton importers
in Asia.
For instance, China's cotton imports in February soared 146%
year-on-year to 138,100 tons, according to the China Cotton
Association.
However, some analysts said that the cotton rally now looks
fragile as speculators were exiting their bullish bets ahead of the
USDA's prospective planting report, which is expected to show an
increase of cotton acreage for the next crop year. The report is
scheduled to be released on March 31.
"This market is not bearish by any means, but the timing and the
market structure just do not seem right" to be bullish, Mr. Rose
said.
On average, traders and analysts expect the government to revise
up the planting projection to 11.9 million acres, from its initial
projection of 11.5 million.
In other markets, raw sugar for May added 0.5% to 17.38 cents a
pound, while cocoa for May was unchanged at $2,165 a ton. Arabica
coffee for May delivery lost 0.3% to $1.4130 a pound, and frozen
concentrated orange-juice futures for May fell 0.6% to $1.8780 a
pound.
Write to Carolyn Cui at
carolyn.cui@wsj.com<mailto:carolyn.cui@wsj.com>
(END) Dow Jones Newswires
March 23, 2017 11:53 ET (15:53 GMT)
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