Cotton futures closed with small losses Monday in activity featuring switch trade as investment funds transferred positions out of the spot contract before deliveries begin later this month, analysts said.
The New York Board of Trade's May cotton contract eased 0.08 cent to close at 52.57 cents a lb, dealing from 52.55 to 53.35 cents. It was almost an inside day since the range on Friday stood at 52.56 to 53.57 cents. July shed 0.03 to 54.57 cents. Back months ranged from 0.20 cent softer to 0.15 cent firmer.
Jobe Moss, an analyst for brokers and merchants MCM Inc in Lubbock, Texas, said most of the running in the market has been in switch trade as players rolled positions from the May contract and into back months like July and new-crop December.
"It's been pretty decent volume, but it's all been spreads and it will likely keep going for a while," he said.
Open interest in the May contract slid 6,140 lots to 80,037 lots as of March 31 while interest in the July contract surged 8,058 to 34,519 lots. The May contract goes into delivery on April 24 and expires on May 8.
Traders said the market swiftly established its trading range in the first few minutes of business and futures never strayed for the rest of the session.
"It's been pretty dead all day long," one said.
In other news, analysts said the upcoming visit of a Chinese delegation to the US may spur the sales of cotton to the Asian giant.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, said "demand remains very impressive" even though growing weather in the US cotton belt will move to centre state by mid-April.
Brokers Flanagan Trading Corp put resistance in the May cotton contract at 52.75 and 53.30 cents, with support at 52.10 and 51.70 cents.
Floor dealers said final trading volume was estimated at 16,000 lots, down from Friday's count of 39,755 lots. Open interest rose 2,239 lots to 138,009 contracts as of March 31.
Comments
Comments are closed.