Cotton futures settled marginally softer Thursday on speculative sales after an early short-covering spree petered out, and brokers said the market may hold in a band until release of a government crop report next week.
The ICE Futures open-outcry December cotton contract shed 0.16 cent to finish at 60.42 cents per lb, moving from 59.99 to 61.25 cents. March cotton fell 0.20 cent to 63.51 cents. The rest declined from 0.19 to 0.45 cent.
ICE Futures electronic cotton market showed the December cotton contract down 0.12 cent to 60.46 cents at 2:30 pm EDT (1830 GMT). Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the initial sentiment amongst fibre contract players was that the December contract may need to probe the recent lows around 59.30 to 59.40 cents.
But put buying in the options ring forced speculators to cover in the futures pit to jack up values in the market, dealers said. "That was the main source of excitement for us. After that, we just treaded water for the rest of the day," one said, with fibre contracts winding up within a few points of unchanged. Stevens believes technical considerations meant the "path that needs to be explored" remains the downside and he feels cotton contracts would take that road in the days ahead.
The market would also wait for leads from the US Agriculture Department's monthly supply/demand report due out next week and take a look at the USDA's weekly export sales report tomorrow. Cotton brokers said they expect total US cotton sales to range from 200,000 to 350,000 running bales (RBs, 500-lbs each) and against last week's sales of 488,300 RBs.
Open-outcry volume in the cotton market on Wednesday was at 4,984 lots and screen trade was at 13,460 lots. Open interest in the cotton market was at 205,996 lots as of September 5, up 990 lots from the previous session. Brokers Flanagan Trading Corp put resistance in the December open-outcry cotton contract at 60.50 and 61.30 cents, with support at 59.80 and 59.20 cents.
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