Cotton falls as dollar's rebound erodes demand for commodities
Sunday, 20 December 2009
NEW YORK, Dec 19 (Bloomberg): Cotton prices fell to the lowest price in four days as the dollar's rebound eroded demand for commodities as alternative investments.
The dollar rose against a basket of six major currencies, extending a rally to a three-month high. Cotton has climbed 54 per cent this year as unusually heavy rainfall damaged crops and hampered harvesting across the US, the world's biggest exporter.
"The dollar has put a lot of markets playing defense," said Keith Brown, the president of Keith Brown & Co, a broker in Moultrie, Georgia. "If the dollar maintains strength in the first part of the year, certainly it could weaken cotton."
Cotton futures for March delivery dropped 0.46 cent, or 0.6 per cent, to 75.28 cents a pound on ICE Futures US in New York, after touching 74.5 cents, the lowest price since December 14. for the week, cotton rose 1.3 per cent.
Cotton for March delivery has "gained" on the December 2010 contract, indicating investors are concerned that supplies will tighten next year, Brown said.
"It signals a dynamic in the market, improving demand and lessening supplies," Brown said.
The dollar rose against a basket of six major currencies, extending a rally to a three-month high. Cotton has climbed 54 per cent this year as unusually heavy rainfall damaged crops and hampered harvesting across the US, the world's biggest exporter.
"The dollar has put a lot of markets playing defense," said Keith Brown, the president of Keith Brown & Co, a broker in Moultrie, Georgia. "If the dollar maintains strength in the first part of the year, certainly it could weaken cotton."
Cotton futures for March delivery dropped 0.46 cent, or 0.6 per cent, to 75.28 cents a pound on ICE Futures US in New York, after touching 74.5 cents, the lowest price since December 14. for the week, cotton rose 1.3 per cent.
Cotton for March delivery has "gained" on the December 2010 contract, indicating investors are concerned that supplies will tighten next year, Brown said.
"It signals a dynamic in the market, improving demand and lessening supplies," Brown said.