Investing.com – Cotton futures plunged to a six-month low on Thursday, as a combination of a broadly stronger U.S. dollar and concerns over a slowdown in Chinese demand weighed on prices.
On the ICE Futures U.S. Exchange, cotton futures for October delivery traded at USD1.3003 a pound during European morning trade, plunging 3.87%.
It earlier fell to USD1.3000 a pound, the lowest price since December 9, 2010.
Mounting fears over a potential Greek default saw risk aversion sharpen, boosting demand for the safe haven U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.4% to trade at 76.33, after earlier rising to 76.42, the highest since May 25.
A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.
Meanwhile, speculation that China planned to further tighten monetary policy triggered fears over a slowdown in demand from the world’s largest cotton consumer and importer.
State-run newspaper Economic Information Daily said in a front-page editorial Thursday that an interest rate increase in China was not “far away” because not doing so would cause more harm to the economy.
The China Cotton Association said Wednesday that Chinese farmers planted 5.4 million hectares of cotton in the 2011 marketing season, up 5.2% from a year earlier.
The rise in plantings added to concerns that China would import less cotton from the U.S. and increase its reliance on domestic supplies.
Chinese trade data released last week showed that cotton imports by China in May fell 12% from a year ago to 1.2 million tons.
Elsewhere, wheat for July delivery tumbled 1.85% to trade at USD6.9625 a bushel, corn for July delivery plunged 2% to trade at USD7.1112 a bushel, while soybeans for July delivery fell 1.3% to trade at USD13.5212 a bushel during European morning trade.
On the ICE Futures U.S. Exchange, cotton futures for October delivery traded at USD1.3003 a pound during European morning trade, plunging 3.87%.
It earlier fell to USD1.3000 a pound, the lowest price since December 9, 2010.
Mounting fears over a potential Greek default saw risk aversion sharpen, boosting demand for the safe haven U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.4% to trade at 76.33, after earlier rising to 76.42, the highest since May 25.
A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.
Meanwhile, speculation that China planned to further tighten monetary policy triggered fears over a slowdown in demand from the world’s largest cotton consumer and importer.
State-run newspaper Economic Information Daily said in a front-page editorial Thursday that an interest rate increase in China was not “far away” because not doing so would cause more harm to the economy.
The China Cotton Association said Wednesday that Chinese farmers planted 5.4 million hectares of cotton in the 2011 marketing season, up 5.2% from a year earlier.
The rise in plantings added to concerns that China would import less cotton from the U.S. and increase its reliance on domestic supplies.
Chinese trade data released last week showed that cotton imports by China in May fell 12% from a year ago to 1.2 million tons.
Elsewhere, wheat for July delivery tumbled 1.85% to trade at USD6.9625 a bushel, corn for July delivery plunged 2% to trade at USD7.1112 a bushel, while soybeans for July delivery fell 1.3% to trade at USD13.5212 a bushel during European morning trade.