NYBOT cotton futures reeled from a fresh bout of speculative fund sales to finish on Tuesday at a fresh 21-month low, with a poor technical outlook and bearish fundamentals seen punishing the market further, brokers said. Key December cotton fell 0.52 cent to finish at 44.52 cents a lb, moving from 45.50 to a new lifetime low of 44.40 cents. Spot October lost 0.37 cent to 43.94 cents.
March slid 0.81 to 45.99 cents and the rest were flat to 0.95 cent lower.
On a continuation chart basis, it was the lowest close for cotton since trading near 42.55 cents in October 2002.
"Where does the haemorrhaging stop?" said Keith Brown, president of commodity trading firm Keith Brown and Co in Moultrie, Georgia. "The bulls have become disheartened, discouraged and disillusioned."
Futures got pounded anew by speculative fund sales, with little in the way of support emerging at the markets lows, brokers said.
Ideal growing weather in the US cotton belt and expectations of large crops in major cotton countries like China has conspired to batter futures, with some now betting that prices could slide below 40 cents in the weeks and months ahead.
Brown said his downside target would be 38 cents, although he added that others were looking at even lower levels.
Sharon Johnson, cotton expert for Frank Schneider and Co Inc, said based on past behaviour, "cotton almost always exceeds its major support or resistance levels by as much as 2 to 4 percent or 1-300 pts so though the low may be close in time or price, futures may yet trade into the low 40s (cents, basis December)."
Brokers Flanagan Trading Corp pegged support in the December contract at 44.20 and 43.80 cents, with resistance at 45.50 and 46 cents.
Floor dealers said estimated final volume amounted to 8,000 contracts, off from Mondays tally of 9,711 lots. Open interest rose 849 lots to 78,902 lots as of July 26.
Comments
Comments are closed.