Cotton futures settled mixed on Wednesday as the focus of the market turned to spread trade between the spot July and new-crop December cotton contract, analysts said. The benchmark July cotton contract slipped 0.16 cent to end at 80.37 cents per lb, trading from 80.29 to 82.49 cents.
Volume traded in the July contract stood at 9,553 lots at 2:32 pm EDT (1832 GMT). New-crop December rose 0.99 cent to end at 77.29 cents, ranging from 76.30 to 77.45 cents. Jobe Moss, an analyst for brokers and merchants MCM Inc in Lubbock, Texas, said most of the action in the market would feature the "unwinding" of positions in July as investors buy into the December contract.
He said the spread business between July and December would be the main feature of market activity as players adjust their positions. The jockeying would also help shed light on how ICE Futures US certificated cotton stocks which now stand at 1.061 million (480-lb) bales would be disposed of.
The market will be taking a look at the weekly export sales report from the US Agriculture Department, which is due out on Thursday. Cotton brokers believe total US cotton sales will range from 250,000 to 400,000 running bales (RBs, 500-lbs each), from last week's 285,200 RBs.
Brokers Flanagan Trading Corp put support in the July contract at 79.60 and 78.75 cents, with resistance at 80.50 and 81.35 cents. Volume traded Tuesday reached 16,812 lots from the previous tally of 12,982 lots, according to ICE Futures. US Open interest was at 177,015 lots as of May 11, from the prior 176,498 lots, the exchange said.
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