Cotton futures settled with small gains on Monday in a muted reaction to a government crop report and analysts said the market was poised to trade in a sideways pattern this week. Benchmark December cotton on ICE Futures US rose 0.42 cent to finish at $1.1229 per lb, after dealing between $1.109 and $1.1325.
Volume hit almost 8,400 lots, around a third under the 30-day average, preliminary Thomson Reuters data showed. "It seems like it's stuck in a range," said Jobe Moss, an analyst for brokers and merchants MCM Inc in Lubbock, Texas. Traders said the market was trapped in a band running from $1.09 to $1.13 to $1.15 in the December contract.
The monthly supply/demand report of the US Agriculture Department was a non-factor for fibre contracts, dealers said. USDA raised its estimate of US cotton production by 100,000 (480-lb) bales to 16.56 million bales, increased planted acreage almost a million acres to 14.72 million, but lowered yields to 807 lbs/acre from 822 lbs/acre in last month's report.
"It didn't have the market impact that I thought it would have. It's almost anti-climactic (of market reaction)," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana. "The USDA s/d report was neutral to cotton. The USDA found an additional 1 million acres planted to cotton but left production unchanged from last month. Obviously, those additional acres will not produce cotton," added a daily commentary by Flanagan Trading Corp in alluding to the severe drought which has hit Texas, the top cotton growing area in the country.
The next report the market will look at is the USDA's weekly crop progress report due out at 4:00 pm EDT (2000 GMT), which should provide an idea how much cotton was damaged by Hurricane Irene and Tropical Storm Lee when it struck North and South Carolina, Virginia, Mississippi and Louisiana. Total volume Friday in the cotton market stood at 15,192 lots, ICE Futures US data showed.
Comments
Comments are closed.