The U.S. Department of Agriculture is due to release on Wednesday its September crop production report, which market participants rely on to gauge supply and demand in cotton for the rest of the year.
Investors also were cautious as they waited to see whether the Federal Reserve will end its policy meeting on Thursday with announcement of a new U.S. economic stimulus.
“Everyone’s holding their breath to see what the USDA report will contain to-morrow for cotton, and what the Fed will decide on Thursday,” said Sharon Johnson, cotton specialist for Knight Futures in Atlanta, Georgia.
“Between the little that was going, there was more selling than buying, resulting in the lower price,” she said.
U.S. cotton’s benchmark December futures contract in New York fell 0.7 cents to close at 74.93 cents per lb, after moving between 76.28 and 74.85 cents.
Most other commodities rose, as investors bet the Fed will act to rescue the economy, lifting prices broadly for the fourth straight session. A weak dollar also provided inflationary support to commodities after Moody’s hinted at a possible U.S. credit rating downgrade.
(Reporting by Barani Krishnan; Editing by David Gregorio)