(Reuters) - ICE cotton gained on Monday for a third straight session as investors covered their short positions after heavy rains in U.S. growing regions hurt output.
“The market was a little higher today just on a little short covering,” said Keith Brown, principal at cotton broker Keith Brown and Co in Moultrie, Georgia, adding that “the crop condition (report‘s) numbers ... should be a little bit worse because of heavy rains in the U.S. Delta region.”
“The market is also oversold in general. We’ve come down over 400 points without any upside correction, so that’s what we’re trying to do.”
The market was focused on the weekly crop progress report from the U.S. Department of Agriculture which was released after the market close on Monday.
Cotton contracts for December settled up 0.28 cent, or 0.42 percent, at 67.56 cents per lb., trading within a range of 67.17 and 67.8 cents a lb.
On Friday, speculators cut their net long position by 3,387 contracts to 27,688 contracts for the same week, after three consecutive weeks of increasing their net long positions, U.S. Commodity Futures Trading Commission (CFTC) data showed.
Total futures market volume fell by 4,864 to 10,891 lots. Data showed total open interest gained 2,723 to 224,330 contracts in the previous session.
Certificated cotton stocks deliverable as of Aug. 18 totaled 13,983 480-lb bales, down from 15,786 in the previous session.
The dollar index was down 0.34 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.54 percent.
Reporting by Nithin Prasad in Bengaluru; Editing by Paul Simao