Cotton futures drop again

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Cotton futures eased for a second session on Monday as the US dollar and equities rallied and traders worried about waning demand for natural fibre as China, the world’s top consumer, prepares to auction off its massive stockpile. Data on Monday showed China’s cotton imports in January sank 40.7 percent, with a 74 percent fall in demand for US fibre.

“Demand is on life support, as is hope of upward price movement,” said O.A. Cleveland, professor emeritus at Mississippi State University. Cotton contracts for May settled down 0.85 cent, or 1.43 percent, at 58.69 cents per pound. They traded within a range of 58.6 and 60.16 cents a pound. Speculative investors increased their net short position in cotton by 4,313 lots to 16,931 lots, the biggest in just over a year after turning net short just one week prior, in the week to February 16, data showed on Friday.

Certificated cotton stocks deliverable as of Friday totalled 61,538 480-pound bales, up from 60,463 in the previous session. The dollar index was up 0.79 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 1.88 percent.

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