Cotton futures settled mixed on Thursday as the market consolidated following its previous rally and was seen marching higher, given the strength of other commodity markets, brokers said. "We had a nice move yesterday. We're showing good support and we'll probably move up some more," said Frank Weathersby, an analyst for brokers Affinity Trading in Fort Walton Beach, Florida.
He said cotton contracts were deriving support from the record prices in both the crude and grains complex. The now benchmark December cotton contract shed 0.01 cent to finish at a revised 76.95 cents per lb, ranging from 76.25 to 77.41 cents. The spot July contract rose 0.39 cent to end at 69.64 cents.
Volume in the December contract stood at 19,885 lots at 2:56 pm EDT (1856 GMT), while July volume was 16,297 lots. News of hot and dry weather in Texas, the top growing state in the country, gave a positive backdrop for futures.
Forecaster DTN Meteorlogix said conditions in Texas, which will plant half of all US cotton, will be mostly dry Thursday, with some showers Friday, then turn drier Saturday and Sunday, and get some rain on Monday. "The question is whether the rains will be sufficient, and one has to wonder how much acreage losses there will be there," a trader said.
The market took note of the US Agriculture Department's weekly export sales report. USDA said total US cotton sales hit 523,500 (500-lb) running bales, down from 577,900 RBs in last week's report. Trade expectations had ranged from 300,000 to 400,000 RBs. Traders said bulk of sales would probably be carried over into the 2008/09 marketing year (August/July) because it is too late to ship the material.
USDA said US cotton export shipments were 317,900 RBs, up from 243,400 RBs last week and higher than trade estimates of 250,000 to 300,000 RBs. Traders said resistance in the December contract was at 78 cents, with support at 76 cents. Volume traded Wednesday in the cotton market hit 52,052 lots, exchange data showed. Open interest in the cotton market rose 2,335 lots to 268,435 as of June 11, it added.
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