Cotton futures finished easier on Tuesday on speculative profit-taking as fibre contracts retreated after surging recently to their highest levels in seven weeks, traders said. The New York Board of Trade's active December cotton contract slid 1.44 cents to end 53.99 cents a lb, moving from 53.85 to 55.40 cents. Spot July fell 1.40 cents to 49.35 cents.
The rest tumbled 0.80 cent to 1.80 cents. "This is a very modest correction," said Mike Stevens of SFS Futures in Mandeville, Louisiana, adding futures may see some follow-through pressure Wednesday.
He said the market's advance was starting to look a bit overdone, so a retreat from those highs seemed to be in order.
Futures started a smidgen lower and the pressure accelerated throughout the session as speculators lightened their holdings in cotton, dealers said.
A decline overnight in cotton prices in China, the world's top producer and consumer of cotton, likewise encouraged the speculators to dump futures, they added.
Analysts will be looking toward a pair of US Department of Agriculture reports that are due out on Thursday.
One is the USDA's plantings report, which will outline actual acreage sown to cotton in the United States.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said she forecast US cotton plantings at 13.97 million acres. Last year, cotton sowings reached 13.659 million acres.
Johnson said the range of estimates amounted to 13.7 million to 14.3 million acres.
The next report would be the weekly USDA export sales data on US cotton sales and shipments.
Brokers Flanagan Trading Corp pegged support in the December contract at 53.90 and 53.10 cents, with resistance at 54.30 and 54.95 cents.
Floor dealers said estimated volume hit 9,000 lots, compared with the previous tally of 15,386 lots. Open interest in the market rose nine lots to 88,598 lots as of June 27.
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