Cotton hits nearly four-year low on dip in crude oil, grains
Aug 16 (Reuters) -ICE cotton futures dipped to its lowest level in nearly four years on Friday, pressured by falling crude oil and grain prices, while a downturn in equities also weighed on the natural fiber.
* Cotton contracts for December CTZ4 fell 0.23 cent, or 0.34%, to 66.92 cents per lb at 11:34 a.m. EDT (1534 GMT), having marked its lowest level since Oct. 2020 earlier in the session.
* The contract is headed for a weekly loss and is down 2.2% so far.
* "A weaker crude and risk-off across other U.S. grains is weighing on cotton prices," said Valentin Olah, risk management consultant at StoneX Group.
* Oil prices fell more than $2 and were on track for a weekly decline, with Brent slipping below $80 a barrel after a string of dismal indicators for July from China overshadowed geopolitical risks. O/R
* Lower crude prices make polyester, an alternative for cotton, less expensive.
* Chicago soybeans and corn prices dropped due to expectations of a high U.S. yield and concerns about Chinese demand and economy. GRA/
* "It remains challenging through the balance of August especially for Texas, with rising temperatures and decreasing precipitation estimates," said Olah, "prices are sliding in a well-defined downtrend, but value is again being discovered by the mills at these levels."
* Elsewhere, Wall Street's main indexes slipped, following the S&P 500 and Nasdaq's six-day winning streak after a spate of encouraging economic data allayed recession worries, while weak housing data dampened sentiment. .N
* The U.S. Department of Agriculture's weekly report showed exports of 131,300 running bales of cotton, whereas net sales of upland cotton totaled 110,900 RB for 2024/2025. EXP/COT
Reporting by Anmol Choubey in Bengaluru; Editing by Shreya Biswas
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