Most US cotton futures closed lower on Wednesday, in another light-volume session, before release of a key government plantings report due early Thursday, brokers said. Benchmark December cotton on ICE Futures US fell 0.61 cent to finish at $1.2140 per lb, moving from $1.1981 to $1.2466. Total market volumes remained depressed, with 10,372 lots traded late in New York, about half of the 30-day norm, Thomson Reuters preliminary data showed.
"It looks like another consolidation day before the acreage report," said Mike Stevens, an independent cotton analyst in Louisiana. He said, the market continued to ignore mixed signals from outside markets, where another down day in cotton on China's Zhengzhou Commodity Exchange was countered by broader strength in the Reuters-Jefferies CRB index.
Most market participants took a cautionary position, ahead of the annual planted acreage report due from the US Agriculture Department at 8:30 am EDT (1230 GMT) on Thursday. Cotton analysts believe US 2011 cotton sowings will reach around 13.26 million acres, the highest in five years, as farmers plant as many acres as they can to offset adverse growing conditions in much of the South.
Weather conditions in the US Southwest and Texas will remain dry through Friday, with temperatures well above normal. "Extreme heat and drought will have a major impact on cotton production across West Texas this year, with virtually no dry land production and reduced irrigated production," forecaster Telvent DTN said. Open interest in the ICE futures cotton market rose by 2,022 lots to 135,984 lots as of June 28, ICE Futures US data showed.
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