New York cotton settles lower

Cotton futures finished lower on Wednesday as trade and speculative selling into sell stop orders hit prices before local buying buoyed the market in pre-holiday trade, brokers said, The key March cotton contract on the New York Board of Trade lost about 2 percent, or 0.90 cent to end the day at 42.72 cents a lb, after moving between 42.21 and 43.70 cents. May fell 0.61 to 43.15 cents, while the rest of the board lost 0.05 to 0.68 cent.
"The trade came in as a seller of the March 45 calls after the opening and pushed us down a little bit ... There were about 500 (sell) stops at $42.60 and below there; and when we started to hit those stops, there was just no buying," said Jobe Moss of MCM Inc in Lubbock, Texas.
Futures began the day a little higher on some speculative buying, but turned lower as speculative and trade selling ran prices into sell-stop orders before local buying lifted prices off their lows, traders said.
"The locals gobbled it up and brought it back today and kind of stabilised it after that," said one.
Brokers noted that business was relatively thin as some market players were already on vacation ahead of the Christmas break, but they did notice some good buying off the lows. "The volume was pretty decent today even for the days before the holiday," said one.
The cotton futures and options market will be closed on Friday for Christmas. Business resumes on Monday, December 27.
Looking ahead at the US Department of Agriculture's weekly export sales report, brokers said they expect US cotton sales to be anywhere from 250,000 to 300,000 running bales (RBs, 500-lbs each), versus 299,300 RBs in last week's report.
They said US cotton shipments of previously booked orders should range from 200,000 to 225,000 RBs, compared with shipments in last week's USDA report of 184,100 RBs. The report will be released at 8:30 am EST (1330 GMT) on Thursday.
Brokerage Flanagan Trading said resistance in the March cotton contract was at 44 and 44.75 cents, while support was now seen at around 42 and 41.75 cents.
Floor dealers said estimated final volume stood at 13,057 lots, up from Tuesday's 6,224 lots. Open interest in the cotton market eased 75 lots to 83,271 lots as of December 21.