Forexpros – Cotton futures declined on Tuesday, trading close to the previous week’s 14-month low as improving U.S. cotton crop conditions and concerns over a slowdown in demand continued to weigh on prices.
On the ICE Futures U.S. Exchange, cotton futures for March delivery traded at USD0.9072 a pound during European afternoon trade, dropping 0.68%.
It earlier fell by as much as 0.8% to trade at a daily low of USD0.9064 a pound. Prices dropped to USD0.8937 a pound on November 22, the lowest level since September 2010.
The U.S. Department of Agriculture said in its weekly crop progress report, published after markets closed Monday, that nearly 92% of the U.S. cotton crop was harvested as of November 27, up from 84% the week before and above the five-year average of 82% for this time of year.
In Texas, the largest cotton-growing state in the U.S., approximately 93% of the cotton crop was harvested as of last week, compared to 82% a week earlier, while 86% of crops in Alabama, the third-largest grower, were harvested, up from 80% a week before.
The U.S. is the world’s third largest cotton producer and the biggest exporter of the fiber.
Cotton futures have declined in six of the last eight trading sessions and have lost nearly 11% in November, as concerns over a slowdown in demand from top consumer China and increasing competition for U.S. export sales have been weighing heavily on prices in recent weeks.
Meanwhile, commodity traders continued to monitor developments out of the euro zone surrounding the region’s debt crisis.
Italy’s Treasury auctioned EUR7.5 billion of debt but borrowing costs surged to euro-era highs. The yield on new three-year bond was 7.89% and 10-year yields climbed to 7.56% from 6.06% at a similar auction last month.
Traders were also eyeing a meeting of euro zone finance ministers later in the day, at which they were expected to approve plans to enlarge the scope of the region’s bailout fund, the European Financial Stability Facility. They were also expected to sign off on Greece’s next tranche of financial aid.
Elsewhere, on the ICE Futures Exchange, coffee futures for March delivery rose 0.53% to trade at USD 2.2960 a pound, while sugar futures for March delivery eased up 0.15% to trade at USD0.2320 a pound.
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