Cotton futures closed with small losses Friday on investor sales although trade and mill buying kept the market supported despite the beating taken by the wider commodity sector, analysts said. The key July cotton contract slipped 0.04 cent to end at 80.72 cents per lb, trading from 80.40 to 81.53 cents. It was an inside day since the range was within Thursday's 80.39 to 81.60 cents band.
Volume traded in the July contract stood at 6,262 lots at 2:29 pm EDT (1829 GMT). New-crop December cotton futures fell 0.27 cent to end at 77.47 cents, ranging from 77.25 to 77.95 cents. Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said fibre contracts again failed to reach the 82-cents level but the pressure from the risk aversion sales which struck other markets were offset in cotton by "enough commercial interest" around 80 cents, basis July. Going forward, analysts said the market must contend with how the certificated cotton stocks on ICE Futures US would be disposed of in the coming weeks.
Those stocks now stand at 1.062 million (480-lb) bales, with no bales being decertified. Stevens said the stocks are in the hands of a few merchants and the attention of the market will be focused on how those commercial houses will dispose of those stocks. One analyst said the market talk is that most of the cotton will eventually wind up with China.
Traders said the market will now look forward to the crop progress report from the US Agriculture Department due out on Monday. Brokers Flanagan Trading Corp sees support in the July contract at 80.50 and 79.60 cents, with resistance at 81.35 and 82.60 cents. Volume traded Thursday reached 15,161 lots, against the previous tally of 17,895 lots, according to ICE Futures. US Open interest in the cotton market was at 178,878 lots as of May 13, from the prior 177,974 lots, the exchange said.
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