Cotton gains amid options expiry and mill fixations


ICE cotton futures rose on Friday with the biggest one-day percentage gain in a week, supported by buying amid December optioons expiry and mill fixations "Fixations, the December option expiration and the index fund roll kept the market supported," said Peter Egli, director of risk management at British merchant Plexus Cotton.

"Once you go past the option expiration with unfixed contracts, the volume becomes very thin ... so, the mills had to pull the trigger on fixations today," Egli added. Cotton contracts for March settled up 0.6 cent, or 0.88 percent, the biggest one-day percentage rise since November 2, at 69.14 cents per lb. It traded within a range of 68.64 and 69.25 cents a lb.

Also, there is some disbelief surrounding Thursday's monthly crop report in the market, according to Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia. The US Department of Agriculture, in its monthly crop supply and demand report, raised US production estimates to 21.38 million bales from 21.12 million bales in the previous month.

"People believe there was a certain amount of cotton lost in Texas because of the freeze and farmers in Georgia were picking smaller cotton crop because of Hurricane Irma. USDA didn't make any allowance for that reduction like people thought," Brown said.

Total futures market volume fell by 23,006 to 40,274 lots. Data showed total open interest fell 3,335 to 233,372 contracts in the previous session. Certificated cotton stocks deliverable as of November 9 totalled 46,922 480-lb bales, up from 41,922 in the previous session. The dollar index was down 0.07 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.12 percent.