Dec. 15 (Bloomberg) -- Cotton rebounded from a 15-month low as the dollar declined, renewing demand for commodities as alternative investments. Orange juice retreated.
The greenback dropped as much as 0.6 percent against a six- currency basket after U.S. economic data showed a quickening recovery. The dollar had gained in the previous three sessions, touching an 11-month high against the euro yesterday. The Standard & Poor’s GSCI index of 24 raw materials rose as much 1 percent after tumbling 4.1 yesterday.
“With the dollar’s reversal, we’re going to see a bit of a reversal in commodities,” Chris Kramedjian, a senior risk- management consultant at INTL FCStone in Nashville, Tennessee, said a telephone interview. “Many people, including hedge funds, got out yesterday. With the weaker dollar, the ‘risk-on’ trade is back.”
Cotton futures for March delivery gained 0.2 percent to 85.28 cents a pound at 10:33 a.m. on ICE Futures in New York. Before today, the fiber plunged 41 percent this year. The commodity touched 84.35 cents yesterday, the lowest since Aug. 24, 2010.
In the week ended Dec. 8, U.S. export sales totaled 45,662 bales, rebounding from net cancellations of 33,004 bales the previous week, the U.S. Department of Agriculture said today. A bale weighs 480 pounds, or 218 kilograms.
“Export sales were OK,” Mike Stevens, an independent trader in Mandeville, Louisiana said in an e-mail. “Shipments are still lagging, and until cotton is shipped, it is subject to cancellation. This continues to hang over the market.”
Orange-juice futures for January delivery slid 0.2 percent to $1.6745 a pound on ICE. Before today, the commodity advanced 2.6 percent this year, heading for a third straight annual gain.
--Editors: Millie Munshi, Daniel Enoch
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