Cotton Trades Lower on Inside Range
U.S. producer prices declined further in April and New York manufacturing activity slipped into contraction. Cash business trading resumed on The Seam.
By Duane Howell DTN Cotton Correspondent
Cotton futures traded lower Wednesday, giving back Tuesday’s gains after back-to-back losing sessions.
Spot July hovered off 84 points at 86.08 cents at 8:01 a.m. CDT, trading within an 85-point inside-day range from 86.89 to 86.04 cents on a contract volume of 1,696 lots.
December fell 103 points to 85.13 cents, just off the low of its 93-point range from 86 to 85.07 cents on a turnover of 454 lots.
In the news, U.S. wholesale prices continued to fall in April, providing new evidence of slack demand in the domestic economy, Dow Jones Newswires reported.
The producer price index, which measures how much businesses pay for finished goods, declined by a seasonally adjusted 0.7% in April from a month earlier, the Labor Department said. It was the biggest one-month decline since February 2010. In March, the index fell by 0.6%.
The bulk of the decline was driven by energy prices, which fell 2.5% on the month. These prices have been falling around the world as the result of weakening demand amid indications that fast-rising U.S. oil production will greatly boost global supply in coming years.
Separately, New York manufacturing activity slipped into contraction this month, Dow Jones reported, citing the Federal Reserve Bank of New York’s Empire state Manufacturing Survey.
The Empire State’s business conditions index declined to minus 1.43 in May from 3.05 in April. A reading below 0 indicates contraction. The May reading is the first negative number since January. Economists surveyed by Dow Jones had expected the latest index to strengthen to 3.5.
In outside markets, Dow Jones futures fell 17 points and S&P futures 3.25, while dollar index futures gained 0.262 to 83.975, crude oil dropped $1.11 to $93.10, Brent crude dipped 78 cents to $101.82 and June gold lost $13 to $1,411.50. Nearby grains and soybeans traded lower.
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