Cotton futures finished easier on Monday on follow-through investor liquidation and the weak tone of global stock and commodity markets, brokers said. The December cotton contract in New York dropped 1.71 cents to end at 59.41 cents per lb, trading from 58.87 to 61.12 cents. Volume in December was at 10,676 lots at 2:36 pm EDT (1836 GMT).
March cotton lost 1.71 cents as well to conclude at 61.88 cents. Frank Weathersby, an analyst for brokers Affinity Trading in Fort Walton Beach, Florida, said the fall in Chinese stocks to their lowest level in two months and weakness in other commodity markets dented confidence in cotton futures. The market took particular notice of China because it is the world's top consumer of cotton. "Business may be slowing down over there," Weathersby said, which added to momentum to sell fibre contracts.
He said though that cotton seems to have run into fixation and mill-type buying at the lows and this would serve to prune market losses. A report by Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said that "regardless of basically bearish supply/demand fundamentals, speculative money managers have their eye on historical levels in the low 70s and (could) be willing to commit more money to cotton on pullbacks."
Weathersby added that cotton could begin stabilising before options expiration at the end of the week. Brokers Flanagan Trading Corp pegged resistance in the December contract at 59.60 and 60.55 cents, with support at 58.75 and 56.90 cents. Total cotton volume traded Friday reached 11,256 lots, down from the previous 17,132 lots, exchange data showed. Open interest in the cotton market hit 132,769 lots as of August 14, down from the previous 133,686 lots, ICE Futures US said.
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