Cotton futures settled easier on Monday on speculative sales but trade buying pared its losses and the market may be stuck in a band this week due to a dearth of news in the pit, brokers said.
The New York Board of Trade's December cotton contract fell 0.26 cent to end at 55.28 cents per lb, in a band from 54.28 to 55.54 cents. March shed 0.16 to 58.24 cents. One contract aside, the rest were flat to up 0.30 cent. "There's no stimuli to be bullish or bearish," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
He said speculators took the market down and enabled the key December contract to hit automatic sell orders at 54.70 cents, but that trade buying and short covering quickly lifted the market from its lows for the session. Fundamentally, the market is monitoring the withering drought that has zapped large swathes of the US cotton belt this year.
Production in Texas, the top growing state in the country, is expected to plunge to between 4.0 million and 4.5 million (480-lb) bales, from nearly 8.0 million bales in 2005/06. Forecasters Meteorlogix said it will be mostly dry through Tuesday but there is a slight chance for scattered showers from Wednesday through Friday.
Further out, the market will be turning its attention to the monthly supply/demand report from the US Agriculture Department due to be handed out at the end of next week. The data will provide the market with its first detailed outlook on supply and demand for the 2006/07 marketing year (August/July).
Broker Flanagan Trading Corp sees resistance in the December contract at 55.50 and 56.25 cents, with support at 54.75 and 53.55 cents. Floor dealers said estimated final volume reached 14,500 lots, versus the previous 5,897 lots. Open interest in the cotton market rose 137 lots to 162,391 lots as of July 28.
Comments
Comments are closed.