Cotton steady as higher oil, grain prices provide support

ICE cotton futures held steady on Tuesday, supported by higher oil prices and a weaker dollar, though broader market pessimism capped gains.
July cotton contracts
"The market failed at key technical levels once again, just as it has for the last six months," said Louis Barbera, partner and analyst at VLM Commodities. "It rallied on significantly lower volume than it declined on, which is typically not very bullish for any market."
Barbera noted that the large carry in the market is prompting traders to roll forward short positions, increasing spread trading volumes.
The U.S. dollar index <.DXY> hovered near a five-month low, making cotton more affordable for holders of other currencies.
Meanwhile, oil prices climbed more than 1%, reaching their highest levels since early March, fueled by Middle East instability and China’s plans for additional economic stimulus.
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