Cotton futures closed lower Friday on investor sales although the market stayed in a band and will be looking for leads to provide direction to fibre contracts next week, brokers said. The key March cotton contract dropped 0.78 cent to finish at 71.07 cents per lb, dealing from 70.98 to 71.95 cents.
It was an inside day since the range was within Thursday's 70.82 to 72.08 cents band. Volume traded in the March contract hit 7,973 lots at 2:40 pm EST (1940 GMT). "It's trying to consolidate," said Mike Stevens, an analyst for SFS Futures in Mandeville, Louisiana. He said the contract needs to close around the area of 72.10 cents in order to confirm that a near-term bottom is in place for the cotton market.
Cotton futures had dropped over 600 points, or 6.00 cents, the past few sessions as technical liquidation hit, although every move down has run into solid trade, consumer and mill fixation buying. Stevens said the fact the market "quiet going down...is encouraging." Analysts said the market will take its cue from the performance of outside markets like stocks, crude and grains to give direction to trading next week.
Partly buoying cotton is the strong performance of US cotton export sales. The US Agriculture Department's weekly export sales report showed that total US cotton sales reached 356,500 running bales (RBs, 500-lbs each), from 440,700 RBs in last week's report. US cotton export shipments hit 197,100 RBs, versus 203,400 RBs in last week's report.
Brokers Flanagan Trading Corp sees resistance in the March contract at 72.85 and 74.05 cents, with support at 71.05 and 70.35 cents. Total volume traded Thursday hit 13,074 lots, against the previous 19,483 lots, according to data from ICE Futures US. Open interest in the cotton market stood at 173,626 lots as of January 21, from the prior count of 173,958 lots, the exchange said.
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