Cotton futures finished sharply lower Tuesday on speculative fund sales and a sell-off in other commodity markets that depressed sentiment in the market, brokers said. ICE Futures open-outcry December cotton contract dove 1.87 cents to close at 63.24 cents per lb, moving from 62.85 to 64.30 cents.
March cotton fell 1.86 cents to 66.63 cents. The rest lost from 0.45 cent to 1.89 cents. The ICE electronic cotton market showed the December contract down 1.86 cents at 63.25 cents at 2:58 pm EDT (1858 GMT), moving from 62.80 to 65.11 cents.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said cotton prices had ridden the rally which catapulted many commodities to multi-year highs the past few sessions. "We are paying for that excess right now. They're (investors) not taking any prisoners today," said Johnson.
Analysts said a long holiday in top consumer China and the fact many players were away to an industrial conference in England likewise depressed sentiment in the market. They said that once the correction from the rally is done in cotton, it may consolidate in a range while waiting for next week's US Agriculture Department monthly/supply demand report.
The longer-term outlook for cotton prices are seen staying firm due to expectations that US cotton sowings will fall further in 2008 because of strong rallies in corn and wheat futures.
US cotton plantings in 2007 were at an 18-year low of 11.01 million acres, the US Agriculture Department said. Brokers Flanagan Trading Corp sees resistance in the open-outcry December cotton contract at 63.25 and 64 cents, with support at 62.50 cents. Open-outcry cotton volume Monday was 5,394 lots, while screen business reached 17,551 lots. Open interest in the cotton market climbed 1,917 lots to 233,686 lots as of October 1.
Comments
Comments are closed.