Cotton dips on Greece jitters ahead of acreage report

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ICE cotton futures fell on Monday, failing to build on Friday’s breakout rally ahead of a US government report expected Tuesday on US acreage devoted to cotton plantings. Concerns about the impact of Greece’s debt crisis on the dollar contributed to the decline.

“It sidelined some traders,” said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia, noting that traders would not “want to buy 100 cotton contracts, and then Greece defaults and the dollar goes through the roof.” A stronger dollar weighs on dollar-traded commodities like cotton by making them more expensive to holders of other currencies.

The US Department of Agriculture is expected to release its annual acreage report on Tuesday. It is widely expected to show a drop in the number of US acres devoted to cotton from the 9.549 million it forecast on March 31. December cotton on ICE Futures US settled down 0.28 cent on Monday, a 0.4 percent loss, to 67.23 cents per pound. It traded within a range of 67.01 and 67.80 cents a pound.

Total futures market volume fell by 18,247 to 26,923 lots. Data showed total open interest gained 8,831 to 176,161 contracts in the previous session. Certificated cotton stocks deliverable in 480-lb bales as of June 26 totalled 180,387, up from 180,271 in the previous session. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.58 percent. Speculators cut their net long position to 14,270 contracts from 16,482 contracts in the week ended June 23, according to US government data released Friday after market close. The Relative Strength Index in the most-active contract fell to 62.291. The most-active soybean futures fell 6 cents to $9.80 per bushel while the front-month corn futures were down 1-3/4 cents to $3.83.

– Reuters

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