Cotton Futures Slip After USDA Reports a Drop in Export Sales
Cotton futures fell Thursday after the U.S. Department of Agriculture reported a sharp drop in last week's export sales.
Cotton for July delivery lost 1.8% to settle at 77.96 cents a pound on the ICE Futures U.S. exchange.
Net export sales of upland cotton, the most commonly grown variety in the U.S., totaled 115,500 running bales in the week ended April 20, down 49% from the prior week, the USDA said on Thursday. South Korea, Japan and China reported lower imports.
"It is the weakest sales since the third week of September," said Herman S. Kohlmeyer Jr., managing director at Michael J. Nugent & Company Inc.
With just three months left for the current marketing years, export sales tends to wind down as most mills are done with cotton buying, he said.
Year to date, total committed export sales have already exceeded the USDA's target for this marketing year.
This year, cotton futures have been rising on robust demand for U.S. fiber overseas, fueled by fears of a trade war that have resulted in aggressive buying from major cotton importers in Asia. But in recent weeks, the remarkable export sales momentum has slowed down.
Cotton exports to China, one of the largest importers, already showed signs of slowing in March. China's cotton imports last month fell 12.4% from a month earlier to 121,000 metric tons, although first-quarter imports increased by 78.4% over a year ago.
Some analysts said cotton prices have reached to levels high enough to entice acreage expansion across the world.
In other markets, raw sugar for May fell 1.3% to close at 15.18 cents a pound, extending the losses into a fourth session; cocoa for July dropped 0.4% to settle at $1,868 a ton; arabica coffee for July delivery lost 0.9% to close at $1.2950 a pound; and frozen concentrated orange juice futures for July fell 2.4% to settle at $1.5595 a pound.
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(END) Dow Jones Newswires
April 27, 2017 15:22 ET (19:22 GMT)