New York cotton futures shade lower

Cotton futures finished slightly easier Tuesday on modest speculative and commercial sales as the market braced for release of a key government crop report this week, brokers said.
The New York Board of Trade's key December cotton contract eased 0.49 cent to settle at 55.17 cents a lb, ranging from 55.10 to 55.85 cents. March shed 0.39 to 56.71 cents. The rest lost from 0.45 to 0.63 cent.
"It's marking time," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia. He said players would be waiting to see if the market would duplicate its previous pattern of staging a strong advance even if the US Department of Agriculture's monthly supply/demand data is bearish due to large cotton crops.
Mike Stevens of brokers SFS Futures in Mandeville, Louisiana, said activity in the market seemed to be "nothing more than mostly spec and local position squaring along with put buying before the report."
Traders said the market would focus on any updates to global cotton demand and if talk that the Chinese cotton crop is in trouble would be confirmed.
In its September crop data, the USDA reduced its estimate for Chinese cotton production in 2005/06 to 25.5 million bales from the previous month's 26 million bales. Chinese cotton imports were seen rising to 14.3 million from 14 million bales.
The analysts said they do not expect major surprises in the US cotton crop. They said any losses caused by Hurricanes Katrina and Rita in the southern United States were likely offset by a large crop in Texas, the leading cotton growing state in the country.
Futures opened a smidgen lower and touched its session low before rebounding on light speculative buying, dealers said.
"Most of the business was done in the first hour and then we just drifted to get ready for the report," one said.
Brokers Flanagan Trading Corp put resistance in the December cotton contract at 56.75 and 57.95 cents, with support at 56.10 and 55.35 cents.
Floor dealers said estimated final volume amounted to 10,500 lots, down from the previous tally of 19,481 lots. Open interest surged 2,922 lots to 114,590 lots as of October 10.