Cotton futures closed slightly easier Thursday on sales by small speculators in lethargic dealings and the market could stay in a band over the next few sessions, analysts said. The New York Board of Trade's March cotton contract shed 0.10 cent to settle at 54.37 cents per lb, moving from 54.22 to 54.60 cents.
May cotton lost the same to 55.40 cents. The rest declined from 0.05 to 0.40 cent. Frank Weathersby, an analyst for brokers Affinity Trading in Fort Walton Beach, Florida, said market players were "looking for anything to inspire" a fresh move in the cotton pit.
If no news is forthcoming, cotton contracts will probably stay in a tight band and "more consolidation" appears to be the order of business in the market. Analysts said the market will probably be range-bound until China, the world's biggest consumer of cotton, steps up its buying, which they feel will probably take place once the Lunar New Year festivities are concluded in mid-February.
They also point to the National Cotton Council's annual meeting early next month when its survey of potential cotton plantings for 2007 is released. Most expect US cotton sowings to be reduced by a sizzling rally in grains prices, with most farmers expected to switch to corn or soybeans.
For now, the US Agriculture Department's weekly export sales report showed total US cotton sales at 254,100 running bales (RBs, 500-lbs each), versus sales last week at 271,700 RBs.
US cotton shipments of previously booked orders reached 172,200 RBs, from 190,000 RBs in last week's data. Brokers Flanagan Trading Corp sees resistance in the March contract at 54.50 and 55.05 cents, with support at 54.10 and 53.60 cents. Floor dealers said final volume stood at 12,000 lots, from the prior tally of 11,068 contracts. Open interest in the cotton market rose one lot to 182,430 lots as of January 24.
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