US cotton dips after hitting one-week low on firmer dollar
Jan 29 (Reuters) -ICE cotton futures dipped on Monday after touching a one-week low earlier under pressure from a stronger U.S. dollar, even as speculators switched to more bullish bets on the natural fiber that could see a smaller U.S. crop.
* Cotton contracts for March CTc1 fell 0.19 cent, or 0.2%, to 84.18 cents per lb by 1:18 p.m. ET (1818 GMT) after hitting their lowest since Jan. 22 earlier.
* Prices touched a more than three-month peak in the previous session, and have risen for the last three weeks.
* "Rollovers have been active this session, which is why the March contract is mostly range-bound .... The higher dollar index is limiting advances of the market," said Valentin Olah, risk management consultant at StoneX Group.
* However, "moving forward into the next couple of months, we could see the U.S. Department of Agriculture (USDA) moving the U.S. crop slightly lower, so that should be supportive," Olah added.
* The dollar firmed 0.3%, making U.S. cotton more expensive for overseas buyers. USD/
* Earlier this month, USDA's World Agricultural Supply and Demand Estimates report trimmed 2023/24 projections for U.S. production by 342,000 bales to 12.43 million bales. USDA/EST
* Speculators switched to a net long position on 21,976 contracts in ICE U.S. cotton futures in the week to Jan. 23, the Commodity Futures Trading Commission said on Friday. CFTC/
* Funds adding longs, buying necessity from the mills, and a lack of selling liquidity are "ingredients for a bullish recipe that could propel the market to 90 cents, perhaps in May, perhaps in July," Olah said.
* In the grains market, Chicago soybeans fell to their lowest in just over two years as more beneficial rain forecast in key producers Brazil and Argentina raised expectations of plentiful world supplies, while corn also fell and wheat dropped. GRA/
Reporting by Deep Vakil in Bengaluru; Editing by Krishna Chandra Eluri
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