By admin       2018-06-20

June 18 (Reuters) - ICE cotton futures fell over 2 percent on Monday to hit a three-week low, weighed down by trade tensions between the United States and China and rains in West Texas, a major producing region. * The most active cotton contract on ICE Futures U.S., the third-month December contract, settled down 2.08 cent, or 2.31 percent, at 87.77 cents per lb. * The contract traded within a range of 87.1, the lowest since May 29, and 89.52 cents a lb. * "It is a reaction to this tariff news. We (also) had some rains throughout West Texas that was certainly not bullish. It is a combination of those factors. The continuation of Friday's decline on trade news for sure," said Beau Stephenson, senior vice president at Omnicotton Inc. * Cotton futures fell more than 3 percent on Friday following news of China's plans to impose tariffs in retaliation for U.S. President Donald Trump's announcement that the United States would put a 25 percent tariff on $50 billion of Chinese goods. * "I think it (tariffs spat) will certainly restructure the way the trade sells and ships cotton moving forward. But it doesn't change that there is still demand for cotton out there. So if its not U.S. cotton going to China, it will be another growth." * China will impose 25 percent tariffs on 659 U.S. goods, ranging from soybeans and autos to seafood, worth $50 billion in response to Trump's tariffs on Chinese imports, the Chinese commerce ministry said. * Tariffs on $34 billion of U.S. goods including agricultural products such as soybeans will take effect from July 6, the ministry said. * China's decision will affect up to 659 U.S. goods, including cotton, Commerzbank said in a note, adding U.S. is hardly likely to profit from rising Chinese cotton imports in 2018/19. * China has approved 800,000 tonnes of additional cotton import quota for 2018, a widely anticipated move by Beijing to allow more overseas purchases. * Meanwhile, significant rains occurred across portions of West Texas over the weekend, with areas south and west of Lubbock receiving much needed moisture, Louis Rose, director of research and analytics at Tennessee-based Rose Commodity, said in a note. * Total futures market volume fell by 25,344 to 41,613 lots. Data showed total open interest fell 18,209 to 291,083 contracts in the previous session. * Certificated cotton stocks CERT-COT-STX deliverable as of June 15 totaled 82,099 480-lb bales, down from 82,285 in the previous session.

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