Cotton futures settled mixed on Wednesday in quiet pre-holiday business, with brokers saying the market will be looking at several factors next week to provide direction after the long holiday break. The market will be shut Thursday and Friday for Thanksgiving. Trading reopens on Monday.
ICE Futures open-outcry December cotton rose 0.01 cent to close at 60.07 cents per lb, trading 59.50 to 60.30 cents. The now key March contract added 0.02 cent to finish at 65.54 cents, moving from 65.35 to 65.95 cents. One contract aside, the rest shed 0.03 to 0.05 cent.
The ICE March electronic cotton contract went up 0.12 cent to 65.64 cents at 2:42 pm EST (1942 GMT), dealing from 65.35 to 65.95 cents. "We had last-minute liquidation" in the December contract, said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia.
But there was solid trade fixation buying as the market slipped and Johnson feels there will be several factors the market will take a look at to determine its next move. One will be how much deliveries are made against the December cotton contract. December cotton contract fell 5,854 lots to 12,314 lots as of November 20. Traders feel that by Wednesday's close, open interest in the contract should be down to 5,000 to 7,500 lots.
The other thing market players will look is the weekly export sales report from the US Agriculture Department which is being handed out on Friday. Cotton brokers said they expect total US cotton sales to range from 150,000 to 250,000 running bales (RBs, 500-lbs each), versus sales last week at 169,100 RBs.
The brokers said US cotton shipments should reach from 170,000 to 200,000 RBs, against last week's 188,500 RBs. Johnson said the now-benchmark March cotton contract would need to hold 65.25 cents or a fall below that would mean a probe of 64.50 cents.
Brokers Flanagan Trading Corp sees support in the open-outcry December cotton contract at 59.65 and 59.05 cents, with resistance at 60.50 and 61.30 cents. Open-outcry cotton volume Tuesday was at 9,443 lots and screen trade at 27,646 lots. Open interest in the market fell 1,059 lots to 218,535 lots as of November 20.
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