Cotton rebounds on short covering, firm oil prices
June 18 (Reuters) -ICE cotton futures edged higher on Tuesday to recover from a more than three-and-a-half-yearlow hit in the previous session as traders covered short positions ahead of the U.S. federal holiday of Juneteenth, while an upbeat sentiment in equities and oil also helped.
* Cotton contracts for December CTZ4 rose 0.45 cents, or 0.6%, to 72.22 cents per lb by 11:01 a.m. ET (1501 GMT).
* The contract hit its lowest since November 2020 at 70 cents in the previous session. Cotton slid to more than3% on Monday, pressured by a stronger dollar and on expectations of good weather boosting supplies. COT/N
* "The basis for today's improved trading is the fact that tomorrow is the US federal holiday and traders are just covering shorts," said Keith Brown, principal at cotton broker Keith Brown and Co in Georgia.
* Oil prices rose on cautious-yet-positivecomments from a New York Federal Reserve policymaker on the future of interest-rate cuts as well asexpectations for a drawdown in U.S. crude inventories. O/R
* Higher oil prices make cotton-substitute polyester more expensive.
* Lending support to the natural fibre,the S&P 500 and the Dow rose following softer-than-expected U.S. retail sales numbers. .N
* "July cotton is going to go into delivery pretty soon and once July gets out of the way, December (contract) might try to improve itself a little bit," Brown added.
* In a weekly crop progress report on Monday, the U.S. Department of Agriculture (USDA) said 54% of the cotton crop was in good-to-excellent condition, compared with 56% a week earlier.
* In the wider grains market, Chicago wheat futures dippedto remain at their lowest level in almost two months, while soybean and corn consolidated after a two-day slide. GRA/
Reporting by Rahul Paswan in Bengaluru; Editing by Shreya Biswas
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