Cotton futures finished mixed Thursday as activity was dominated by switch trade, with better-than-expected US cotton sales giving the market a mild early boost, analysts said. The New York Board of Trade's July contract slipped 0.43 cent to end at 46.64 cents a lb, ranging from 46.60 and 47.85 cents.
New-crop December rose 0.03 to 50.63 cents, trading between 50.55 and 51.95 cents. Except for two contracts, back months declined from 0.02 to 0.25 cent.
Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, said the market moved higher due in part to robust US cotton sales in the US Department of Agriculture's weekly export sales report.
USDA said US cotton sales hit 273,500 running bales (RBs, 500-lbs each), above trade belief it would run from 125,000 to 160,000 RBs. US cotton shipments of previously booked orders stood at 300,300 RBs, at the top of expected range of 250,000 to 300,000 RBs.
Brown and other dealers said that fuelled an early spurt of trade buying. Small speculators piled in, but when the trade buying dried up, they dumped futures, they added.
At that point, switch trade took over as players continued to liquidate positions in the spot July contract. Open interest in July sank 4,371 lots to 23,449 contracts as of June 15 while interest in the December contract rose 3,633 to 58,917 lots. The July contract goes into first notice for deliveries at the close of trade on June 24.
Brown said the current erratic tone of trading will likely persist. "We're just going to chop around here," he said.
Traders took note of news that the United States and China will be having initial consultations to diffuse textile trade tensions.
Brokers Flanagan Trading Corp sees support in the now active December cotton contract at 50.40 and 49.90 cents, with resistance at 51.05 and 51.85 cents.
Floor dealers said estimated final trading volume hit 20,000 lots, from the prior 23,914 lots. Open interest in the market rose 1,800 lots to 97,090 lots as of June 15.
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