NYBOT cotton futures closed mixed Tuesday in narrow-ranged trade as the market kept an eye on news that heavy rain may sweep into Texas, the top cotton growing area in the United States, analysts said.
Key December cotton slipped 0.10 cent to conclude at 47.23 cents a lb, dealing from 47.15 to 48.64 cents. March shed 0.05 to 49.15 cents. Aside from one contract, back months went up 0.10 to 1.05 cents.
Mike Stevens of Swiss Financial Services in Mandeville, Louisiana, said cotton contracts posted strong gains at the start partly due to forecasts that unwanted rain would drench the key High Plains region of Texas.
Weather Channel said in a report on its Web site (www.weather.com) that heavy showers and thunderstorms from moisture derived from the Gulf of Mexico will "continue to douse" the state.
The harvest is just beginning to gather steam in large parts of the US cotton belt.
Rains in Texas would not be welcome because the cotton bolls are open and the moisture would delay harvesting, reduce yields and harm cotton quality, industry officials have said.
Late sales by small speculators gradually eroded futures to nudge the benchmark December contract into slightly negative territory, analysts said.
Stevens said cotton prices will likely stay around its current level until a key US government report is released next week.
That would be the US Department of Agriculture's monthly supply/demand report on October 12 containing a fresh update on estimates for cotton production and consumption in the 2004/05 marketing year (August/July).
Fundamentally, the market must contend with large crops in the US and China. According to the USDA, the US will harvest a record crop of 20.9 million (480-lb) bales and China is seen producing 29.5 million bales.
Brokers Flanagan Trading Corp. said it believes support in the December cotton contract would be at 47.10 and 46.35 cents, with resistance at 47.75 and 48.30 cents.
Floor dealers pegged estimated final volume at 10,000 lots, from Monday's 4,407 lots. Open interest in the cotton market fell 118 lots to 72,571 lots as of October 4.