New York cotton ends lower

Cotton futures settled easier Tuesday on speculative sales but the market is seen staying in a band while looking toward release of a government plantings report at the end of the month, brokers said. The New York Board of Trade's May cotton contract fell 1.00 cent to close at 53.56 cents per lb, trading from 53.55 to 54.70 cents.
July eased 0.75 to 54.45 cents. Back months declined from 0.30 to 0.66 cent. The IntercontinentalExchange's NYBOT electronic market for cotton showed the May contract down 0.91 cent to 53.65 cents at 2:29 pm EDT (1829 GMT), moving from 53.56 to 54.68 cents. Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said fibre contracts broke down from the session highs when speculative sales knocked key May below 54 cents and triggered automatic sell orders as a result.
"We'll probably back and fill (and) hold these lower areas," he said, adding most players will be reluctant "to stick their neck out" before the plantings data is released on March 30. The potential plantings report by the US Agriculture Department is widely expected to show a reduction of US cotton sowings in 2007.
Last year, USDA said US farmers sowed 15.276 million acres to cotton. The industry group National Cotton Council said in a survey released last February 2 that farmers would plant only 13.21 million acres to cotton this year. Most analysts believe US cotton plantings could fall more and range from 12.5 million to 13 million acres. Several feel it could slide and flirt with an area near 12 million acres.
"There are a lot of guesses that are going to be thrown up in the air, but we should see a better consensus on this when we get into next week," one said. Brokers Flanagan Trading Corp see resistance in May cotton at 53.75 and 54.35 cents, with support at 53.30 and 52.80 cents.
Floor dealers said final estimated cotton volume in open outcry stood at 16,000 lots, from the prior tally of 5,256 contracts. NYBOT said electronic trading volume Monday was at 2,255 lots. Open interest in the cotton market rose 1,430 lots to 212,282 lots as of March 12.