Cotton futures closed slightly lower on Wednesday, giving up early gains as short covering that boosted prices in the previous session faded and rising exchange stocks eased concerns about tightening supplies. On Tuesday, prices notched up their biggest one-day gain in nearly three months after an eight-day losing streak, as bargain prices below 60 cents per lb triggered mill buying and short covering.
"The (recent) decline has facilitated the movement of large quantities of physical cotton, which allows the trade to cover shorts," INTL analysts said. But they warned that gains may be "tenuous" as traders are increasingly nervous about the timing and contents of any disclosure from Beijing's state reserve about its plans to auction off some of its massive stockpile.
The most-active May cotton contract on ICE Futures US settled down 0.19 cent, or 0.32 percent, at 59.55 cents per lb, after hitting 59.35 cents a pound. Certificated cotton stocks deliverable as of Tuesday totalled 50,283 480-lb bales, surging by a third from 37,821 in the previous session even as the front-month price remained at a premium to May. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was up 2.31 percent. Reflecting the extent of the short covering on Tuesday, data showed total open interest fell 15,214, or about 7.5 percent, to 188,677 contracts in the previous session, the biggest one-day drop in years.
Comments
Comments are closed.