ICE cotton tumbles on weak export sales; Texas rain damage seen limited

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NEW YORK, Oct 22 (Reuters) – ICE cotton futures experienced their largest single-session loss in more than a month on Thursday as a weak export sales report reinforced demand concerns and traders said recent rains in Texas were likely not as damaging to crops as some had feared. U.S.upland cotton export sales for the 2015/16 crop year totaled 96,900 bales last week, with the bulk being sold to Mexico and none to top consumer China, where recent policy changes have limited imports.

“The exports were anemic,” said Jobe Moss, a broker with MCM Inc.in Lubbock, Texas.
“The problem this market hasn’t come to grips with is China ain’t there anymore.” In addition, Moss said that while rains in leading U.S.production regions in West Texas could harm quality, the storms were not severe enough to dramatically affect yields.
Concerns about the wet weather had contributed to a two-day rally that saw prices hit near two-month highs on Wednesday. A sharply stronger U.S.dollar also weighed on prices for the fiber, Moss said.
A stronger dollar pressures greenback-traded commodities like cotton by making them more expensive to holders of other currencies.

December cotton on ICE Futures U.S. CTc1 settled down by 1.71 cents on Thursday, a 2.7 percent loss, at 62.52 cents per pound. It traded within a range of 62.37 to 64.69 cents.

Certificated cotton stocks CERT-COT-STX deliverable as of Oct. 21 totaled 42,318 480-lb bales, down from 42,445 in the previous session.

The dollar index .DXY was up 1.34 percent. The Thomson Reuters CoreCommodity CRB Index .TRJCRB , which tracks 19 commodities, was up 0.04 percent.

The Relative Strength Index in the most active contract CTc1 fell to 50.806.

(Reporting by Luc Cohen; Editing by James Dalgleish)

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