June 7, 2018 / 9:05 PM / 3 months ago

ICE cotton futures jump 2.5 pct to mark over six-year high

June 7 (Reuters) - ICE cotton futures rose 2.5 percent on Thursday to hit an over six-year high, propelled by fund-buying and amid expectations of an increase in buying from major importer China.

* The most active cotton contract on ICE Futures U.S., the third-month December contract , settled up 2.24 cent, or 2.47 percent, at 92.79 cents per lb.

* The third month contract traded within a range of 89.98 and 93.80 cents a lb, a peak since March 2012.

* The contract also touched the technically overbought territory with a relative strength index (RSI) over 70 on Thursday. An RSI of less than 30 signals oversold, while over 70 signals overbought.

* “Funds are buying back some of the long positions they shed over the last month in anticipation of the (monthly) USDA report,” said Gabriel Crivorot, an analyst at Societe Generale in New York.

* The U.S. Department of Agriculture’s (USDA) World Agricultural Supply and Demand Estimates (WASDE) report are due on Tuesday.

* Prices were also reacting to reports that China is going to probably import an extra 10 million bales of cotton next year, a New York-based trader said.

* China is set to return as a major cotton importer, taking 10 million to 15 million bales (2 million to 3 million tonnes) each year by 2019/20, said Tim Bourgois, head of the cotton platform at major trading house Louis Dreyfus Company.

* The USDA on Thursday reported net upland sales of 6,800 running bales (RB) for 2017/2018, a marketing-year low, and 106,800 RB for 2018-19 for the week ended May 31. Exports of 576,400 RB, a marketing-year high, were up 54 percent from the previous week and 35 percent from the prior 4-week average.

* Total futures market volume rose by 35,411 to 77,237 lots. Data showed total open interest gained 1,138 to 321,683 contracts in the previous session. (Reporting by Sumita Layek in Bengaluru; Editing by Sandra Maler)

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