Cotton futures closed down almost 2 percent and teetered close to the psychologically key 80-cent mark on Wednesday on technical selling, rising availability and minimal buying. Fibre was the second-worst performance behind heating oil out of the 19 tracked by the Thomson Reuters/CoreCommodity CRB index as supplies of old 2012/13 crop continued to rise.
"The lower we went the more sell stops we ran into, the more outright speculator selling," said Sharon Johnson, a cotton specialist with KCG Futures in Atlanta. Another 8,163 bales arrived in exchange warehouses on Tuesday, taking the total to 94,501, the highest since late July. Another 40,000 are awaiting review.
Notching up its fourth straight day of losses, ICE's most-active December cotton contract closed down 1.76 cents, or 2 percent, at 80.69 cents a lb. It fell as low as 80.52, its lowest since February 4. For the second-month, it was the lowest since September 5.
Prices have been under pressure since the US Department of Agriculture released on Monday its first crop progress report in three weeks, which revealed almost half the US crop is in good or excellent condition. That is up from 42 percent last year. "We're still behind, but we've had an increase in crop conditions," said Johnson. "That set the stage for prices to be weaker." The US dollar inched up while stocks fell on concerns about revenue growth and company forecasts amid company reporting season.
US crude oil sank to its lowest since July after government data showed an increase in crude supplies. "Stocks and crude (oil) are down. The dollar up. Those are all negatives for cotton, and there's no friendly news," Johnson said. Looking ahead, the market braced for the US commodities regulator to resume publication of its weekly Commitment of Traders report on Friday following the reopening of government last week.
Comments
Comments are closed.