Cotton futures settled lower Friday on modest speculative sales as the market will pay close attention to deliveries in the spot December contract on November 22, brokers said.
The New York Board of Trade's key December cotton contract shed 0.33 cent to finish at 49.31 cents a lb, dealing from 49.25 to 49.80 cents. March lost the same to 52.63 cents. The rest slipped from 0.05 to 0.55 cent.
Fundamentally, analysts said cotton players would want the delivery period to get out of the way so the trade could focus on the next move in prices.
The US cotton harvest is proceeding and merchants were keeping tabs on the pace of demand from countries like China, the world's top consumer of cotton.
"It's all been in the switch," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, in describing Friday's activity.
He said there is keen interest in the delivery for December because a rule due to take effect next year which would impose higher charges on cotton that is more than two years old.
Open interest in the December contract tumbled 5,879 to 13,932 lots as of Thursday while interest in March rose 918 lots to 70,490 contracts.
Steadiness in the difference between the December and March cotton contracts at around 300 to 320 points would also seem to indicate that there will be a major receiver for the cotton next week.
"The group taking delivery has to be certain it has a home for that cotton because of the increased charges. With that in mind, we will also be watching to see how much cotton will be decertified," a dealer said.
Demands by African countries for a swift end to cotton subsidies were given little attention in the market since any reductions would need to be negotiated in the World Trade Organisation, the dealers said.
Broker Flanagan Trading Corp sees resistance in December cotton at 49.80 and 50.50 cents, with support at 49.10 and 48.35 cents.
Floor dealers said estimated final volume amounted to 23,000 lots, down from the prior tally of 26,137 lots. Open interest fell 3,980 lots to 98,729 contracts as of Thursday.