Cotton futures finished with modest gains on Tuesday in mostly technical business following Monday's close at 8-1/2 month lows with more rangebound dealings expected in the coming days, market sources said.
"It was a pretty sleepy day. We have been down for about seven trading sessions, so it was just a little technical bounce today," said one floor dealer.
The New York Board of Trade's December cotton contract rose 0.09 cent at 48.02 cents a lb, just off the lower end of its 48.01 to 48.65 cent range.
March gained 0.09 cent to 50.10 cents, while the rest closed mixed, from down 0.05 to up 0.05 cent.
Cotton futures have been on the defensive recently, falling to levels last seen since late December 2004, on market expectations and a bearish USDA monthly supply/demand report, released last Friday, that showed a hefty US crop estimate at 21.3 million bales.
Rains over the weekend in west Texas placed more pressure on prices as ample supply issues started to weigh on traders' minds.
The New York Board of Trade's spec/hedge report for cotton showed a speculative net short position of 4.2 percent for the week ended August 12, against a net long position 4.8 percent the previous week.
Meanwhile, the USDA said Monday that the US crop condition improved to 64 percent good to excellent in the week ended August 14, from 61 percent the previous week.
"I think as the perception grows that the crop is enlarging itself, I think the market will grind lower," said Keith Brown, president of commodity trading firm Keith Brown and Co Inc in Moultrie, Georgia.
Forecaster Meteorlogix called for isolated showers in Texas Wednesday, with mostly dry conditions Thursday through Saturday.
Brokers Flanagan Trading Corp sees resistance in the December contract at 48.00 and 48.65 cents, with support at 47.25 and 46.10 cents.
Estimated final volume was reached only 6,348 lots Tuesday, against 14,884 lots recorded on Monday. Open interest increased by 1,981 lots to 101,198 lots as of August 15.
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