Investing.com - Cotton futures rose for the first time in three days on Wednesday, as the fiber’s drop to a four-week low created bargain buying opportunities for investors, while a broadly weaker U.S. dollar also lent support.
On the ICE Futures U.S. Exchange, cotton futures for March delivery traded at USD0.9372 a pound during European afternoon trade, gaining 0.5%.
It earlier rose by as much as 0.85% to trade at a session high USD0.9411 a pound. On Tuesday, prices fell to USD0.9316, the lowest since January 3.
Cotton prices have lost nearly 7% since climbing to a two-month high of USD0.9946 on January 24, as concerns over the global economic outlook raised fears over a slowdown in demand for the fiber.
However, the sharp decline triggered some bargain buying from traders reluctant to bet that prices would fall further amid expectations demand from top consumer China will remain strong in the near-term.
Cotton traders have been focusing on prospects for increased Chinese demand in recent months after the country started a cotton stockpile in September to protect domestic farmers' interests.
China is both the world’s largest producer and consumer of the fiber.
Cotton prices found additional support after agribusiness financial service provider Rabobank raised its average cotton price forecast for the first quarter of 2012 to USD0.9500 a pound, saying a longstanding drought in America's main southern growing areas "remains a concern".
Meanwhile, agricultural commodities received a lift from a broadly weaker U.S. dollar. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.75% to trade at 78.83.
A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.
Appetite for riskier assets improved amid fresh hopes on a debt deal for Greece. Also supporting market sentiment were reports showing slowing contraction in euro zone manufacturing activity in January.
Elsewhere, on the ICE Futures Exchange, coffee futures for March delivery shed 0.45% to trade at USD 2.1368 a pound, while sugar futures for March delivery slumped 0.5% to trade at USD0.2364 a pound.
On the ICE Futures U.S. Exchange, cotton futures for March delivery traded at USD0.9372 a pound during European afternoon trade, gaining 0.5%.
It earlier rose by as much as 0.85% to trade at a session high USD0.9411 a pound. On Tuesday, prices fell to USD0.9316, the lowest since January 3.
Cotton prices have lost nearly 7% since climbing to a two-month high of USD0.9946 on January 24, as concerns over the global economic outlook raised fears over a slowdown in demand for the fiber.
However, the sharp decline triggered some bargain buying from traders reluctant to bet that prices would fall further amid expectations demand from top consumer China will remain strong in the near-term.
Cotton traders have been focusing on prospects for increased Chinese demand in recent months after the country started a cotton stockpile in September to protect domestic farmers' interests.
China is both the world’s largest producer and consumer of the fiber.
Cotton prices found additional support after agribusiness financial service provider Rabobank raised its average cotton price forecast for the first quarter of 2012 to USD0.9500 a pound, saying a longstanding drought in America's main southern growing areas "remains a concern".
Meanwhile, agricultural commodities received a lift from a broadly weaker U.S. dollar. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.75% to trade at 78.83.
A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.
Appetite for riskier assets improved amid fresh hopes on a debt deal for Greece. Also supporting market sentiment were reports showing slowing contraction in euro zone manufacturing activity in January.
Elsewhere, on the ICE Futures Exchange, coffee futures for March delivery shed 0.45% to trade at USD 2.1368 a pound, while sugar futures for March delivery slumped 0.5% to trade at USD0.2364 a pound.