Cotton drops to 2-week low on dollar rebound, China COVID curbs

Freeport Resources

21/11/2022 17:06

Nov 21 (Reuters) - ICE cotton futures traded limit down
to hit a more than two-week low on Monday, pressured by an
advance in the U.S. dollar as market sentiment was dented by
worries about a rise in COVID cases in the top consumer China.
    * The most-active cotton contract for March  CTH3  slid 4
cents, or 4.8%, to its lowest since Nov. 4 at 79.78 cents per lb
at 12:26 EDT (1626 GMT).
    * The U.S. dollar advanced, recouping recent losses and
making cotton more expensive for overseas buyers.  USD/ 
    * "The fundamentals driving it (cotton) down just happen to
be COVID, strong dollar and we have a weaker prices in the fall
of the year because supplies are plentiful," said Keith Brown,
principal at cotton broker Keith Brown and Co in Georgia.
    * "The fact that China closed large areas of Beijing, the
capital, as well as several other cities, is weighing on the
market."
        * China's capital warned it was facing its most severe
test of the COVID-19 pandemic, tightening rules for entering the
city as infections ticked higher in Beijing and nationally.
 urn:newsml:reuters.com:*:nL1N32H07M 
    * Chicago soybean, corn and wheat futures also eased on
rising COVID-19 cases in China.  GRA/ 
    * Additionally, oil prices dropped to their lowest since
early January on discussions of an output increase.  O/R 
    * Lower oil prices make polyester, a substitute for cotton,
less expensive.
    * Cotton speculators trimmed their net short position by
3,269 contracts to 13,377 in week to Nov. 15, data from the
Commodity Futures Trading Commission (CFTC) showed on Friday. 
 (Reporting by Rahul Paswan in Bengaluru;)
 ((RahulKumar.Paswan@thomsonreuters.com; If within U.S. +1 646
223 8780;;))