Cotton futures settled slightly easier Thursday on thin investor sales as players eyed an EU summit Friday to tackle the bloc's debt crisis and awaited release of a government crop report tomorrow, analysts said. Cotton was pressured by weak financial markets as investors were dismayed by the European Central Bank's lukewarm support for aggressive action to resolve the crisis.
Key March cotton futures slipped 0.26 cent to end at 92.05 cents per lb, moving from 91.66 to 92.99 cents. On Wednesday, the trading band stood at 91.75 to 93.80 cents. Volume traded Thursday stood at around 6,600 lots, over two-thirds under the 30-day average, according to ICE Futures data. "We're waiting for the Europeans. That's the big thing," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia.
The debt crisis has roiled financial markets for weeks, raising the prospect of a destabilising recession, which could hit most any country in the world. Brown added cotton market participants are also going to wait for release of the US Agriculture Department's monthly supply/demand report. USDA is expected to cut its estimate of US 2011/12 cotton production and adjust its forecast of US 2011/12 cotton exports.
USDA had forecast US 2011/12 cotton production at 16.3 million (480-lb bales) in its November supply data, from 16.61 million bales in the preceding month. US cotton exports were forecast at 11.3 million bales, from 11.5 million bales. Open interest, usually taken as an indicator of investor exposure in the market, came to 140,708 lots on Tuesday, from the prior session's 139,821 lots, exchange data showed. Volume traded Tuesday amounted to 9,344 lots versus the prior session's 12,621 lots, ICE Futures US data reported.
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