Cotton futures finished lower Wednesday on switch-related speculative sales as players continued to steadily move positions out of spot July before the start of delivery on June 24, traders said. The New York Board of Trade's July contract fell 0.53 cent to end at 47.07 cents a lb, dealing between 47 and 47.75 cents. New-crop December lost 0.52 to 50.60 cents, ranging from 50.57 and 51.20 cents. The rest of the board retreated 0.05 to 0.50 cent.
Mike Stevens of SFS Futures in Mandeville, Louisiana, said an early push by speculators to the session highs ran into light fund sales which prompted the same speculators to dump cotton.
After that initial flurry of deals, Stevens said most of the running in the market was "all in the switches."
Open interest in July sank 3,619 lots to 27,820 contracts as of June 14 while interest in the December contract climbed 2,369 to 55,284 lots. The July contract goes into first notice at the close of trade on June 24.
"It's mostly switch trade. I just don't see it changing its tack over the next few days until we get rid of July and see who will take delivery in the contract," a dealer said.
On Thursday, the market will be turning its attention toward the US Department of Agriculture's weekly export sales data due out at 8:30 am EDT (1230 GMT).
Cotton brokers said they expect US cotton sales to range from 125,000 to 160,000 running bales (RBs, 500-lbs each). Last week, sales hit 155,900 RBs.
US cotton shipments of previously booked orders are seen ranging from 250,000 to 300,000 RBs, against shipments in last week's USDA report of 275,200 RBs.
Brokers Flanagan Trading Corp sees support in the now active December cotton contract at 50.40 cents, with resistance at 51.05 and 51.85 cents.
Floor dealers said estimated final trading volume hit 25,000 lots, up from Tuesday's count of 23,500 lots. Open interest fell 1,099 lots to 95,290 lots as of June 14.
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