Mumbai: ICE cotton fell for the third straight session to touch a one-month low on Wednesday as expectations of record high output from major producer United States weighed on the natural fiber market. Cotton for December settled 0.34 cent, or 0.5 percent, lower at 66.82 cents per lb. Earlier in the session, the contract hit a low of 66.76 cents, its lowest since July 17.
“I think the reason the market is trending lower is because we’ve got an enormous crop out here,” said John Bondurant, a trader in Memphis, Tennessee. “The big news is the fantastic yields in South Texas.” The first survey of U.S. 2017 crop production indicated an output of 20.5 million bales, 1.5 million above last month and the largest production in 11 year, the U.S. Department of Agriculture said in its monthly World Agricultural Supply and Demand Estimates (WASDE) last week.
Meanwhile, output from top producer India was seen at 33.09 million bales for the 2016/17 crop year against the previous forecast of 32.58 million bales, according to data released by the farm ministry. Total futures market volume rose by 67 to 18,726 lots. Data showed total open interest gained 471 to 218,749 contracts in the previous session. Certificated cotton stocks deliverable as of August 15 totaled 17,315 480-lb bales, down from 18,082 in the previous session. (Reporting by Nithin Prasad and Vijaykumar Vedala in Bengaluru; Editing by Marguerita Choy)