NEW YORK, Dec 16 (Reuters) – Cotton futures dipped in light volume on Wednesday, paring gains from earlier in the session after the U.S.Federal Reserve announced an interest rate hike, boosting the dollar and raising concerns that capital would flow out of commodities.
“We had a real modest day on the volume,” said Louis Rose, independent cotton trader and consultant with Risk Analytics in Memphis, Tennessee, noting that “cheap money” that has flowed into commodities like cotton as a result of “loose policy” may seek out more secure investments.
March cotton on ICE Futures U.S. CTc1 CTH6 settled down 0.06 cent, or 0.09 percent, at 63.25 cents per lb. It traded within a range of 63.06 and 63.62 cents a lb.That marked the contract’s fifth consecutive session of losses.
Total futures market volume rose to 13,836 contracts, from 13,482 contracts in the prior session.
The dollar index .DXY was down 0.2 percent. The Thomson Reuters CoreCommodity CRB Index .TRJCRB , which tracks 19 commodities, was down 1.4 percent.
(Reporting By Luc Cohen; Editing by Jonathan Oatis)