Dec. 16 (Bloomberg) -- Cotton futures pared losses on the dollar’s decline and prospects for a rebound in fiber demand after prices approached a 15-month low. Orange juice advanced.
The dollar dropped as much as 0.5 percent against a six- currency basket, boosting demand for commodities as alternative assets, after U.S. economic data this week suggested the recovery is gaining traction. Buying from mills and other commercial cotton users increased after the fiber touched 84.35 cents a pound on Dec. 14, the lowest since Aug. 24, 2010, said Sterling Smith, an analyst at Country Hedging.
“This market has gotten pretty cheap, and I think we’re getting a little better demand at these prices from the end- users,” Smith said in a telephone interview from St. Paul, Minnesota.
Cotton futures for March delivery settled unchanged at 86.29 cents at 2:39 p.m. on ICE Futures U.S. in New York, capping a 4.6 percent decline for the week. Earlier, the price dropped as much as 0.8 percent after gaining as much as 2.3 percent this morning. The fiber has plunged 40 percent this year.
“The upside is extremely limited” for prices, Smith said. “The dismal outlook for Europe is going to continue to weigh on cotton.”
Orange-juice futures for January delivery rose 0.4 percent to $1.6705 a pound on ICE. The commodity lost 1.7 percent this week. It has advanced 2.1 percent this year, heading for a third straight annual gain.
--Editors: Millie Munshi, Patrick McKiernan
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