Cotton futures finished lower Thursday as some investors liquidated their positions in the spot contract and such switch trade should stay the main feature of the market into next week, brokers said.
New York Board of Trade's December cotton contract fell 0.81 cent to settle at 47.88 cents per lb, moving from 47.80 to 49.20 cents. March shed 0.71 to 51.40 cents. The rest lost 0.45 to 0.71 cent.
"December is making preparations for delivery. This is keeping us on the defensive for now," said Keith Brown, president of commodity trading house Keith Brown and Co in Moultrie, Georgia.
Open interest in the December contract dove 9,627 lots to 25,908 contracts as of November 15 while interest in March rose 3,288 contracts to 103,736 lots. Deliveries in December begin November 22, the day before the long US Thanksgiving break. The contract expires on December 6.
Brown said the rolling or transferring positions from December into the back months will persist right into first notice day. Brown said the US Agriculture Department's weekly export sales report did not provide any sign of that and were decidedly "lacklustre."
USDA said total US cotton sales amounted to 167,700 running bales (RBs, 500-lbs each), against trade belief it would range from 150,000 to 200,000 RBs. Last week, sales hit 186,300 RBs. US cotton shipments of previously booked orders reached 146,600 RBs, versus trade belief of 100,000 to 150,000 RBs and shipments last week of 129,500 RBs. Brokers Flanagan Trading Corp put resistance in the December contract at 48.05 and 48.75 cents, with support at 47.50 and 46.95 cents.
Floor sources said final volume came to around 27,500 lots, down from Wednesday's tally of 36,766 lots. Open interest slid 5,369 lots to 167,320 contracts as of November 15.
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