Cotton ticks up on technical buying; traders await Fed rate decision

Dec 10 (Reuters) - ICE cotton futures ticked up on Wednesday on technical buying, as traders turned their attention to U.S. Federal Reserve meeting later in the day, where the central bank is widely expected to cut interest rates.

Cotton contracts for March CTH6 rose 0.2 cents, or 0.2%, at 63.97 cents per lb at 9:39 a.m. ET (1439 GMT), up for the second straight session.

On Tuesday, the contract snapped a six-session losing streak.

"We're seeing a nice little rebound here today, second day in a row with market moving a little bit higher," said cotton risk management consultant at StoneX Bailey Thomen, adding that WASDE was a non event and pretty much within expectations.

In its December World Agricultural Supply and Demand Estimates (WASDE) report, the USDA on Tuesday projected U.S. cotton production to rise 1% to 14.3 million bales, as yields were raised for most states in the Southeast and Delta.

The global 2025/26 balance sheet for December shows slightly lower production, consumption and trade, but higher end of marketing year stocks compared to last month, the WASDE report showed.

"In the near term, we probably will see more sideways trading unless we have some major adjustments or major changes either from a fundamental standpoint in cotton or if we see something change potentially from the Federal Reserve meeting," Thomen added.

Traders are closely watching the Federal Reserve meeting scheduled to conclude later in the day, with markets expecting an 90% chance of a quarter-point rate cut.

A rate reduction aimed at supporting U.S. economic growth typically boosts consumer spending, which in turn can drive higher demand for textiles like cotton.

Data on Tuesday showed ICE cotton speculators trim net short position by 8,029 contracts to 70,889 in week to November 4. CFTC/