New York cotton settles lower

Cotton futures settled lower on Monday on investment fund selling as weakness in other commodity markets kept fibre contracts on the defensive, brokers said. The ICE Futures' May cotton contract dove 1.45 cents to close at 69.43 cents per lb, trading from 69.17 to 71.26 cents.
The new-crop December cotton futures fell 1.44 to 81.64 cents, dealing from 81.25 to 83.02 cents. "The influence of the outside markets is proving to be irresistible," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia.
The market is bracing for the start of deliveries in the May contract this week and with cotton stocks standing at more than a million (480-lb) bales, Brown feels it is difficult for cotton futures to make much headway north.
According to the exchange, cotton stocks stood at 1,042,890 bales. On switches, open interest in the May cotton contract stood at 17,012 lots as of April 18, from 20,048 lots previously.
"What will make this upcoming delivery period potentially the most interesting in a long while, is that not only are (cotton) cert stocks at record highs but the market differences are actually reflecting considerably more than carrying charges," said a report by Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
"This could make for a tempting situation for a big fund that might have the nearly $400 million it would take to take delivery of that much cotton," Stevens concluded.
Traders said the market will be waiting for leads from the US Agriculture Department's weekly crop progress report which is handed out after the market is closed later on Monday. "We could be pricing in the stock situation and the way the market is behaving, we could see it go down a bit more this week," a dealer said.
Broker Flanagan Trading Corp sees resistance in the now active July cotton contract at 74.05 and 75.75 cents, with support at 72.50 cents. The contract ended Monday at 73.35 cents. Volume traded in the cotton market Friday was at 20,611 lots, with open interest in the market down 3,074 lots to 256,274 contracts as of April 18, exchange data showed.