Cotton extends rally on speculative buying, low stocks
Feb 28 (Reuters) -U.S. cotton futures extended gains on Wednesday to scale a more than one-year high, steered by speculative buying and low stocks of the natural fiber.
* Cotton contract for May CTc2 rose 3.3 cents, or 3.3%, to 102.07 per lb by 11:54 a.m. ET (1654 GMT), the highest level since mid-September 2022.
* There is a shortage of certified stocks, which have been absent from the market for several months, driving prices upward, said Rogers Varner, president of Varner Brokerage, in Cleveland.
* Speculative buying is also contributing to the price increase, with speculators holding long positions in response to low ending stocks and strong recent sales, he added. EXP/COT
* The U.S. Department of Agriculture (USDA) in its February World Agricultural Supply and Demand Estimates (WASDE) report showed that 2023/24 U.S. cotton balance sheet has lower ending stocks relative to last month, with higher exports and lower mill use, while production is unchanged.
* The WASDE report also raised export forecast by 200,000 bales to 12.3 million based on a strong pace of shipments and sales to date.
* Certified cotton stocks, which can be delivered against the contract, were at 985 bales compared with 3,267 bales on Dec. 28, according to ICE data.
* Speculators raised net long position by 10,214 contracts to 67,851 contracts in ICE U.S. cotton futures in the week of Feb. 20, the Commodity Futures Trading Commission said on Friday.
* In the grains market, Chicago soybean futures edged lower on Wednesday as cheap South American supply made U.S. beans less competitive in export markets and speculators bet on further price declines. GRA/
Reporting by Anushree Mukherjee in Bengaluru; Editing by Shilpi Majumdar
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