New York cotton futures plummet

Cotton futures finished sharply lower Wednesday as another round of speculative sales hammered the market, and the weak tone meant fibre contracts could slip further this week, brokers said. The New York Board of Trade's December cotton contract slumped 0.87 cent to settle at 48.33 cents per lb, in a band from 48.08 to 48.70 cents.
March slid 1.02 to 51.43 cents. The rest lost 0.60 to 1.25 cents. Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the inability of the market to build on its recent steadiness prompted speculators to bail on cotton.
"We've gotten a lot more down days than up days the last three weeks," he said, adding weakness in the complex was a signal for players to push many contracts into new lifetime lows during Wednesday's session.
Dealers said trade and suspected consumer buying/export business enabled cotton to hold its lows and prevent the market from falling completely out of bed. Another source of weakness for cotton, according to analysts, is that China, the world's top consumer of cotton, has not really stepped up to the plate in purchasing the fibre, especially since its needs are much lower than initially thought.
"The Chinese are not there and they can afford to sit back and wait before filling up on their cotton imports," one said. Looking toward the weekly export sales report by the US Agriculture Department, cotton brokers said they expect total US cotton sales to range from 250,000 to 350,000 running bales (RBs, 500-lbs each), from sales last week at 353,500 RBs. Upland sales last week hit a marketing year high of 337,800 RBs.
US cotton shipments of previously booked orders are expected to reach 75,000 to 125,000 RBs, from 113,100 RBs in last week's USDA data. Broker Flanagan Trading Corp sees resistance in the December contract at 48.75 and 49.30 cents, with support at 48.25 and 47.75 cents. Floor sources said final volume hit around 13,000 lots, from the previous tally of 16,687 lots. Open interest in the cotton market rose 1,901 lots to 184,505 lots as of October 17.