New York cotton ends mostly down

NYBOT cotton futures closed mostly easier Friday as switch trade dominated business and a bearish government production report was ignored for the most part by the trade, dealers said. December cotton added 0.46 cent to finish at 44.34 cents a lb, dealing between 43.50 and 44.40 cents. Active March slipped 0.13 to 42.85 cents, moving from 42.95 to a new lifetime low of 42.10 cents. The rest lost 0.47 to 0.80 cent.
"They've got to get the rolling done," said Sharon Johnson, cotton expert for Frank Schneider and Co Inc in Atlanta.
Market players were busy transferring positions before first notice day in the December contract on November 22. Open interest in December fell 2,844 lots to 29,389 lots as of November 11 while interest in March rose 3,271 to 42,456 lots.
The USDA's monthly supply report raised its forecast for the 2004/05 US cotton crop to a record 22.54 million (480-lb) bales from its estimate of 21.54 million bales last month.
World cotton production was increased to 111.72 million bales, from 109.67 million last month, consumption climbed to 102.93 million from 101.4 million, and world ending stocks surged to 44.55 million versus 41.95 million.
Johnson said the recent losses suffered by cotton over the past few sessions meant market players were "anticipating these bearish numbers," so they have already been partly priced into the market.
Traders said business next week should be dominated by liquidation activity in December as players wind down positions in the contract.
Johnson feels though that the bearish USDA figures will eventually pressure active March, which takes over as the spot month when the December contract expires on December 8.
Separately, the USDA's weekly export sales report showed US cotton sales hit 167,000 running bales (RBs, 500-lbs each), above trade estimates of 100,000 to 150,000 RBs.
US cotton shipments of previously booked orders stood at 123,300 RBs, versus trade belief of 100,000-130,000 RBs.
Brokers Flanagan Trading Corp said resistance in the December cotton contract was at 44.90 and 45.50 cents, with support at 44.25 and 43.65 cents.
Floor dealers said estimated final volume was 25,000 lots, from Thursday's 19,321 lots. Open interest in the cotton market rose 660 lots to 92,454 lots as of November 11.