Cotton futures settled Friday at another month low on speculative liquidation, with the trade waiting for release of a report on potential US cotton plantings in 2005, analysts said. New York Board of Trade March cotton fell 0.51 cent to end at 43.35 cents a lb, trading between 42.40 and 44.25 cents. It was the lowest close for the contract since 42.92 cents on December 27, 2004.
May lost 0.53 to 44.54 cents. The rest retreated 0.35 to 0.80 cent.
Frank Weathersby of brokers Affinity Trading in Fort Walton Beach, Florida, said speculative accounts were getting out as they slowly transferred their positions from the spot March contract and into back months.
"It's really more of the specs getting out," he said, adding though the market seems to be enjoying robust trade support at the lows.
The trade buying, according to brokers, is a strong indication of the strong level of consumer demand for the fibre so that any losses in the market are quickly blunted.
"The trade is there on the dips. We may get more pressure over the next few weeks, but the level of demand is very persistent," one said.
Fundamentally, cotton is burdened by record supplies but this has been offset by robust consumption from places like China, both the world's biggest producer and consumer of cotton.
The market is also looking toward the late Friday release of the annual survey by main industry group National Cotton Council of potential US cotton plantings in the 2005 season.
A survey by Reuters showed that US industry participants feel US cotton sowings will rise to an average of 14.2378 million acres, up from 13.76 million in 2004.
Brokers Flanagan Trading Corp said initial support in March cotton would be at 43.05 and 42.40 cents, with resistance at 43.55 and 44.55 cents.
Floor traders said final estimated volume amounted to 45,000 contracts, up from Thursday's tally of 38,525 lots. Open interest dove 3,072 contracts to 95,858 lots as of January 27.
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