ICE cotton futures rose on Monday to touch an over one-week high supported by dry weather concerns in Texas, the top cotton producing state in the United States. The most active cotton contract on ICE Futures US, the third-month December contract, settled up 1.02 cent, or 1.21 percent, at 85.47 cents per lb.
It traded within a range of 84.14 and 85.72 cents a lb, touching a peak since June 29. "I think we are focused back on the weather as well as the crop reports (USDA's WASDE) this Thursday," said Jack Scoville, vice president with Price Futures Group in Chicago.
"The weather remains mostly hot and dry in the Texas Panhandle and surrounding areas, and this is a big production area... Yield losses are very possible and the market is starting to move higher in response," Scoville added. The US Department of Agriculture (USDA) is scheduled to release the monthly World Agricultural Supply and Demand Estimates (WASDE) on July 12.
"WASDE report will provide some insight as to how much the USDA believes continued droughty conditions across west Texas, India, Pakistan and other areas has reduced this season's production potential - and how much a smaller crop might trim overall demand for raw cotton, if any," Louis Rose, director of research and analytics at Tennessee-based Rose Commodity Group, said in a note.
Meanwhile, speculators cut their net long position in cotton by 3,408 contracts to 83,661 in the week to July 3, US Commodity Futures Trading Commission data showed on Monday.
Total futures market volume fell by 1,240 to 20,723 lots. Data showed total open interest fell 1,103 to 252,680 contracts in the previous session. Certificated cotton stocks deliverable as of July 6 totalled 33,224 480-lb bales, up from 31,351 in the previous session.