Cotton futures finished sharply lower Thursday on investor liquidation as a firm dollar and weak outside markets pressured fibre contracts, brokers said. The December cotton contract declined 1.50 cents to finish at 61.34 cents per lb, trading from 60.99 to 62.81 cents. It was an inside day because it was within Wednesday's 60.65 to 63.08 cents band.
December contract volume reached 7,038 lots at 2:45 pm EDT (1845 GMT). March cotton fell 1.44 cents to end at 63.56 cents, dealing from 63.16 to 64.90 cents. Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia, said the steadier dollar put pressure of commodities pretty much across the board. He said some in the trade may also be dialing in a poor US jobs data due out on Friday.
The momentum from those twin factors could lead to further losses in cotton before the weekend, Brown explained. "We're (also) on the cusp of harvest" of the US cotton crop, he said in listing down another factor which could put pressure on cotton. Analysts said the weekly export sales report from the US Agriculture Department did not exactly help sentiment.
USDA said total US cotton sales reached 76,600 running bales (RBs, 500-lbs each), from 60,000 RBs in last week's report and trade expectations it will range from 50,000 to 150,000 RBs. "That wasn't an encouraging performance on the sales front. It was the second week in a row where sales were simply horrible," a dealer said.
Brokers Flanagan Trading put support in the December cotton contract at 61.25 and 60.30 cents, with resistance at 62.60 and 63.05 cents. Total cotton volume traded Wednesday was at 14,158 lots, from the prior tally of 11,082 lots, ICE Futures US said. Open interest declined to 146,055 lots as of September 30 from the previous count of 147,191 lots, the exchange said.
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