ICE cotton hits 2-1/2-week high as quality concerns remain

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Cotton futures rose for a second straight session on Monday, hitting their highest levels in 2-1/2 weeks, as traders squared books ahead of the new year and a US government report showed a continued shortage of high-quality cotton. “It was definitely much better-than-expected volume on a short day like today,” said Chris Kramedjian, a risk management consultant with INTL FCStone in Memphis, Tennessee, referring to the market’s late open time due to the Christmas holiday.

A weekly US Department of Agriculture report released Monday showed 56.2 percent of bales classed so far this season were of a high enough quality to be tenderable against futures contracts, significantly below average, as poor harvest weather has damaged crop quality. March cotton on ICE Futures US settled up 0.31 cent, or 0.49 percent, at 63.97 cents per lb, after rising as high as 64.44 cents a lb, the highest level since Dec. 10.

Certificated cotton stocks deliverable as of Dec. 24 totalled 64,723 480-lb bales, unchanged from 64,723 in the previous session. The dollar index was down 0.06 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.93 percent. The Relative Strength Index in the most-active contract rose to 57.865.

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