ICE cotton rises on bargain hunting after hitting 18-month low
May 16 (Reuters) -ICE cotton futures rebounded 2% on Thursday as some investors took advantage of a recent price drop to buy the natural fiber, while focus remained on planting progress and weather conditions in growing areas.
* Cotton contracts for July CTc1 gained 1.5 cents, or 2%, to 76.94 cents per lb by 12:20 p.m. ET (1620 GMT), after dropping to an over 18-month low in the previous session.
* "The market is super oversold, and there is no weather premium in the new crop. So we've probably come down too far too fast. There are no willing sellers in the market right now," which is buoying prices, said Keith Brown, principal at cotton broker Keith Brown and Co. in Georgia.
* Oil futures rose, bolstered by slower than expected inflation and a stabilising U.S. job market. O/R
* Higher oil prices make cotton-substitute polyester costlier.
* However, "the ongoing U.S. cotton planting season is contributing to the bearish sentiment, with the latest USDA US Crop Progress Report indicating that 33% of the crop has been sown, outpacing the five-year average of 31%," analysts at BMI wrote in a note.
* The United States blocked imports from 26 Chinese cotton traders or warehouse facilities to eliminate goods made with the forced labor of Uyghur minorities from the U.S. supply chain.
* The U.S. Department of Agriculture's (USDA) weekly export sales report showed net sales of 156,50 running bales (RB) for 2023/2024, down 38% from previous week and down 7% from the prior 4-week average. EXP/COT
* The report also showed exports of 238,800 RB, down 4% from the previous week and unchanged from the prior four-week average.
* "The exports and sales were less than last week and that did break the market a little bit ... but now we're back up. So if we maintain this posture, I think we'll be higher tomorrow into the weekend," Brown added.
Reporting by Anjana Anil in Bengaluru; Editing by Alan Barona
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