Cotton Bounces Higher As Buyers Enter Wider Market

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Cotton prices had their biggest percentage gain in a month on Tuesday, as bullish moves across the grains and soy complexes led buyers to the cotton market.

Cotton for July delivery ended up 2% at 62.20 cents a pound on the ICE Futures U.S. exchange, it’s highest percentage move since April 18 and its highest close in nearly two weeks.

 China has been auctioning off its vast cotton reserves at a pace of 30,000 tons a day, with robust interest from local mills. So far, the government is mostly auctioning high-quality cotton, and traders are looking for signs it has run out of its best reserves with the auctioning of lower quality fibers, some of which are years old. Little is known about the quality of the cotton stockpiles, and some traders say lower-quality fiber coming out of those auctions could be a signal that the government will ramp up imports.

At the same time, U.S. planting progress is on track and above the five-year average.

In other markets, raw sugar futures for July delivery lost 0.4% to end at 16.82 cents a pound, cocoa for July dropped 1% to close at $2,899 a ton, arabica coffee for July delivery lost 0.7% to close at $1.327 a pound and frozen concentrated orange juice futures gained 2% to settle at $1.4635 a pound.

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