Cotton futures touched its lowest level in three weeks as it closed in the negative zone on Thursday session after the US government reported disappointing exports sales.
Getting Too Hard
Cotton futures received a major hammering on Thursday as it gave up 1.8% to finish at 77.96 cents per pound in the ICE Futures US Exchange, the biggest one-day percentage drop in more than three weeks.
The commodity has reached its three-month high last April 24 but pared these gains in the following sessions as weather concerns and recent batches of economic data weighed in.
The recent record of exports sales seemed to get too hard on the soft commodity as the US government reported that total exports of upland cotton have tumbled down by a whopping 49%, for a net of 115 500 running bales for the week ending in April 20th.
According to USDA, the top customers South Korea, Japan and China have decided to lower their imports, which provided big impact to US exports, with China’s imports slowing down by 12.4%.
For the first quarter, the cotton futures have been steady due to rising demand for US fibers abroad but this week showed a remarkable melt down on exports sales.
Herman Kohlmeyer Jr., an expert from the Michael J. Nugent & Company Inc., stresses that low exports sales were prompted by most mills that are already done with buying the commodity while some analysts believed that cotton prices have already reached enough high levels.