Cotton heads for weekly dip on weak sales data, China demand risk

Freeport Resources

18/11/2022 17:49

Nov 18 (Reuters) - ICE cotton futures hit a two-week low
earlier on Friday, heading for their first weekly decline in
three, after top consumer China revised its COVID restrictions
and poor U.S. sales data dented demand outlook for the natural
fiber.    
    * The most-active cotton contract for March  CTH3  fell 1.08
cent, or 1.3%, to 84.20 cents per lb at 12:30 ET (1730 GMT),
with prices down more than 2% so far this week.
    * "The export sales report yesterday was pretty lousy... We
need some better demand, export demand and quite frankly it is
not showing up," said Jack Scoville, vice president at
Chicago-based Price Futures Group.
    * "There was news of new lockdowns in China and I think
that's having as much to do with it (cotton market) as
anything," Scoville added.
    * Beijing's biggest district urged people to stay home
during the weekend as China further fine-tuned its COVID rules. 
    * U.S. Department of Agriculture's weekly export sales
report showed net sales of 25,100 running bales (RB) for
2022/2023, significantly lower from 145,800 RB in the previous
week.  EXP/COT 
    * Adding further pressure to cotton prices, oil was on track
for a second weekly decline, pressured by concern about
weakening demand in China and further increases to U.S. interest
rates.  O/R 
    * Lower oil prices make polyester, a substitute for cotton,
less expensive.
 (Reporting by Rahul Paswan in Bengaluru; Editing by Shailesh
Kuber)
 ((RahulKumar.Paswan@thomsonreuters.com; If within U.S. +1 646
223 8780;;))