Cotton futures ended softer Friday on sales by small speculators as the market appeared to be consolidating after its recent sharp losses in the pit, brokers said. The New York Board of Trade's open-outcry July cotton contract fell 0.57 cent to conclude at 50.48 cents per lb, in a tight band from 50.35 to 50.75 cents.
The new-crop December cotton contract slipped 0.23 to 56.43 cents. The rest lost from 0.10 to 0.50 cent. IntercontinentalExchange's NYBOT electronic cotton market showed the July contract down 0.48 cent at 50.57 cents at 2:41 pm EDT (1841 GMT).
"I think we're consolidating," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia. He added the consolidation was taking place following the market's fall from a six-week top as the trade absorbed the negative impact of the sell-off.
A report by Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said the December contract may "begin to feel greater hedge pressure from producers/merchants above 57 and certainly as it approaches 58 (cents)." The markets will soon turn toward the process of rolling positions out of front July and into the back months before first notice for deliveries is posted on June 25.
With that in mind, open interest in July fell 4,394 to 114,338 lots and open interest in December rose 4,900 to 78,000 lots. The July contract expires on July 9.
Brown said the market will also be waiting for a pair of key government reports that will be handed out this month. One is the US Agriculture Department's monthly supply/demand report on June 11 and the other is the USDA's plantings data on June 29. Brokers Flanagan Trading Corp sees resistance in the July contract at 50.50 and 50.90 cents, with support at 49.25 and 48.70 cents.
Floor dealers said final estimated open-outcry volume stood at 16,800 lots, from the prior total volume of 23,955 lots. Screen trade Thursday was at 11,167 lots, NYBOT said. Open interest was at 223,814 lots as of May 31, up 723 lots from the previous session.
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