Cotton set for best week in 1-1/2 year on short covering, softer dollar
Sept 20 (Reuters) -ICE cotton futures rose more than 1% on Friday and were on track for their best week since March 2023 on short covering from speculators due to concerns over supply of the natural fiber, while an overall weaker U.S. dollar also helped.
* Cotton contracts for December CTZ4 were up 1.09 cents, or 1.5%, at 74.12 cents per lb at 10:46 a.m. EDT (1446 GMT). The contract is up 6.2% so far this week.
* "We are seeing a lot of speculators and funds short covering due to a much smaller world crop and a smaller U.S. crop in the last 2-3 months," said Rogers Varner, president of Varner Brokerage in Cleveland.
* "However, the demand is not that good... So the cotton market seems to be balanced and I think the market for several months may trade between the 66 - 76 cent level."
* In its September World Agriculture Supply and Demand Estimates (WASDE) report on Thursday, the U.S. Department of Agriculture (USDA) lowered U.S. production estimates to 14.5 million bales and global output estimate to 116.4 million bales.
* The USDA's weekly exports sales data on Thursday showed net sales of upland totaling 106,800 running bales of cotton for 2024/2025, down 8% from the previous week and 23% from the prior four-week average. EXP/COT
* Meanwhile, the dollar =USD was heading for its third weekly loss after dropping to a one-year low earlier this week, making cotton less expensive for other currency holders. USD/
* Wall Street's main indexes slipped on Friday as investors held back after a rally in the previous session that was sparked by an oversized interest rate cut by the Federal Reserve. .N
* Elsewhere, Chicago wheat, corn and soybean futures edged up on Friday as the crop markets monitored weather forecasts in major production zones while assessing mixed export indicators, analysts said. GRA/
Reporting by Brijesh Patel in Bengaluru; Editing by Shreya Biswas
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