New York cotton softens on speculative sales

Cotton futures ended easier Thursday on moderate speculative sales as the market stayed in a band and the weekly government export report did not figure in trading, brokers said.
The New York Board of Trade's benchmark May contract fell 0.65 cent to close at 54.71 cents a lb, dealing from 54.65 to 55.40 cents. July shed 0.57 to 56 cents. The rest retreated from 0.15 to 0.50 cent.
"The market has looked all day like it wanted to test the downside but the perception of trade buying below is keeping the locals from being too aggressive," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
Automatic sell-orders were triggered when the May contract slipped below 55 and 54.80 cents, the dealers said.
Analysts said that every time cotton prices would probe the lower end of the range, trade buying believed tied to export business would show up and pare market losses.
"There is pretty good underlying trade and commercial support for cotton, so that would serve to keep any downturn in the market limited," one explained.
While the pace of sales appears to be slowing down for US exporters, shipments of previously booked orders has picked up and the United States is on track to export a record 16.4 million (480-lb) bales of cotton in the 2005/06 marketing year.
The US Department of Agriculture's weekly export sales report showed total US cotton sales at 241,600 running bales, vs. last week's total sales of 324,100 RBs.
US cotton shipments of previously booked orders amounted to 452,900 RBs, up from 402,500 RBs in last week's report.
Traders said operators will be turning their attention to next week's monthly supply/demand report from the USDA to see if there are any major changes in the figures for world cotton production and consumption.
Further out, they will also eye the USDA's annual planting intentions data on March 31 on potential US cotton plantings for 2006/07.
Broker Flanagan Trading Corp sees resistance in the May cotton contract at 55.10 and 55.75 cents, with support at 54.70 and 54.10 cents. Floor dealers said final trading volume was estimated at 17,000 lots, from the prior count of 10,208 lots. Open interest rose 1,036 lots to 123,399 contracts as of March 1.