US cotton futures ended lower Monday amid some options-related sales while most big operators waited on the sidelines for Friday's USDA monthly supply report which should give an outline for the global cotton market, brokers said.
"December futures remain rangebound ahead of Friday's supply/demand report and are likely to remain within the 51 to 53 cent range until then," said brokers Flanagan Trading Corporation in a daily cotton comment.
The New York Board of Trade's December cotton contract lost 0.48 cent to finish at 51.25 cents a lb after dealing in a narrow range of 51.23 to 51.73 cents. March slipped 0.49 to 53.28 cents and back month contracts fell 0.10 to 0.53 cent.
"There was really not a lot of volume today. It looked a lot like the action seen on Friday where the guys in options were just buying puts and selling calls, but the trade continue to be scale-up buyers of it, keeping it in a quiet range," said one cotton broker adding that rains in west Texas and a good part of the delta over the weekend may have been the catalysts for the bearish plays.
Forecasters Meteorlogix predict mostly dry conditions through the week with the possibility of a late day thundershower Wednesday through Friday and see favourable conditions through west Texas.
The market awaits the monthly US Department of Agriculture supply/demand report due out on Friday, August 12, which will give the market an indication of how demand is looking in the first part of the 2005/06 marketing year (August/July).
Most analysts said the focus of the USDA report next week will be on the likely size of the US cotton crop and what kind of demand will likely emerge from China, the world's top consumer of cotton.
Floor dealers said estimated volume was 7,000 lots, off from Friday's official count of 7,413 lots. Open interest fell 49 lots to 94,052 lots as of August 5.
Flanagan Trading sees resistance in the December contract at 51.85 and 52.35 cents, with support at 51.05 and then 50.40 cents.
Comments
Comments are closed.