Forexpros – Cotton futures were down on Wednesday, hovering close to a nine-month low as ongoing concerns over a slowdown in demand for U.S. supplies dragged prices lower.
On the ICE Futures U.S. Exchange, cotton futures for October delivery traded at USD0.9983 a pound during European morning trade, tumbling 2.25%.
It earlier fell as much as 2.95% to trade at a daily low of USD0.9917 a pound, just above a nine-month low of USD0.9763 it hit on Monday.
The U.S. Department of Agriculture said in its weekly report on Tuesday that cotton for export inspected at U.S. ports in the week ended July 7 fell by a net 91,200 bales as cancellations exceeded orders for the fourth consecutive week.
Cancellations have exceeded sales in 15 of the last 16 weeks, as high prices and an uncertain economic outlook have weighed on demand.
On July 13, the USDA cut its U.S. export estimates by 500,000 bales to 14.5 million for the 2010-11 season.
According to Chinese customs data, cotton imports by China fell 27% in May from a year earlier, while imports in the first half of the year were down 14% from the same period a year earlier.
The U.S. is the world’s third largest cotton producer and the world’s largest exporter of the fiber, while China is the world’s largest consumer.
Agribusiness financial service provider Rabobank said that new orders from Asian mills, major consumers, has “virtually stopped” after the rise in cotton prices to a record high kept a lid on consumer demand, and encouraged a switch to other fibers.
For prices, “there still could be plenty of more room left to go on the downside as this historic bull market unravels,” the lender said in a report late Tuesday.
Cotton prices have plummeted nearly 55% since hitting a record high of USD2.197 a pound on March 7.
Elsewhere, on the Chicago Mercantile Exchange, wheat for September delivery rallied 1.75% to trade at USD7.0550 a bushel, corn for September delivery climbed 0.71% to trade at USD7.0475 a bushel, while soybeans for August delivery added 0.55% to trade at USD13.8875 a bushel.
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