Cotton drops to over 4-month low on strong dollar, technical selling
April 18 (Reuters) -ICE cotton futures dipped to a more than four-month low on Thursday, pressured by a stronger U.S. dollar and speculators selling amid bearish technical signals.
* Cotton contracts for May CTc1 fell 1.7 cents, or 2.2%, to 77.9 cents per lb by 11:48 a.m. ET (1548 GMT).
* "We continue to see quite a bit of liquidations coming in from the speculative side after the long position that had been built up over the previous couple of weeks or months and then now they continue to sell it very aggressively day by day," said Bailey Thomen, cotton risk management consultant at StoneX Group.
* On the technical front, cotton prices are trading below 50-, 100- and 200-day moving averages. Speculators who trade on technical signals regard a break below such moving averages as a bearish sign.
* The dollar index .DXY was up 0.1% near a one-month high, making cotton more expensive for overseas buyers.
* The U.S. Department of Agriculture's (USDA) weekly export sales report showed net sales of 146,100 running bales for 2023/2024, up 79% from the previous week and 64% from the prior four-week average. EXP/COT
* The report also showed exports of 266,700 running bales, down 3% from the previous week and 24% from the prior four-week average.
* "We actually did see pretty decent sales and shipments.
I will say the only caveat there was that the biggest buyer was China for most of the entire quantity, whereas other countries were much quieter this week," Thomen added.
Reporting by Anjana Anil in Bengaluru; Editing by Vijay Kishore
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