New York cotton settles lower

Cotton futures settled lower Wednesday on investor sales, but the market again pared its losses as players waited for leads to provide direction on its next move, brokers said. The new-crop December cotton contract fell 0.60 cent to close at 59.11 cents per lb, ranging from 58.62 to 59.80 cents. It was an inside day because the range was within Tuesday's 58.51 to 60.49 cents band.
Volume traded in the December contract was at 4,705 lots at 2:39 pm EDT (1839 GMT). The March cotton contract shed 0.57 cent to end at 61.67 cents. "It's (the cotton market) marching to its own little drum," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
He said cotton futures are "defying gravity" given the weak performance of outside markets like stocks and crude. Technical players said the close above 59.07 cents in the December contract meant cotton would be in a position to move higher in the coming days. They said a close below 58.40 cents in the contract would lead to further losses in the market.
The market is now bracing for release of a pair of government reports. On Thursday, the US Agriculture Department will hand out its weekly export sales report. Cotton brokers said they expect total US cotton sales to range from 100,000 to 150,000 running bales (RBs, 500-lbs each), from sales last week of 249,700 RBs. Friday, the USDA will issue its monthly supply/demand report.
Most in the trade believe the report will not provide a huge surprise for cotton market players. "The (USDA's) August (supply/demand) report is the biggie," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana. "July is usually a non-event. I can't imagine any changes of any consequence" in this month's USDA report, he added.
Brokerage Flanagan Trading Corp sees support in the December contract at 58.65 and 56.35 cents, with resistance at 59.70 and 60.50 cents. Total volume traded Tuesday reached 7,320 lots, versus the previous tally of 5,625 contracts, exchange data showed. Open interest in the cotton market was at 113,267 lots as of July 7, from the previous count of 112,944 contracts, ICE Futures US said.