Cotton futures settled lower Wednesday due to modest speculative sales caused in part by disappointment in the spot December contract in front of a lengthy holiday weekend, brokers said. The US cotton market will be shut Thursday and Friday for Thanksgiving. Trading resumes Monday.
The New York Board of Trade's key March cotton contract shed 0.70 cent to end at 52.61 cents a lb, trading from 52.21 to 53.16 cents. May fell 0.60 to 53.90 cents. Two contracts aside, the rest lost 1.00 cent.
"It's given back (almost) everything that it gained yesterday," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
He said the small amount of deliveries in the December cotton contract is causing some in the trade to fret that there will be no major receiver of the cotton going on the board.
"That's psychologically demoralising (for the market)," he said. The current weakness in the December cotton contract, Stevens added, meant the glum mood in fiber contracts may not totally dissipate until the spot month expires on December 7.
Fundamentally, the market is monitoring the harvest of the US cotton crop and keeping an eye on the pace of global demand for cotton.
Looking toward the weekly export sales report from the US Department of Agriculture, cotton brokers said they expect US cotton sales to range between 200,000 and 300,000 running bales (RBs, 500-lbs each), against sales last week of 242,300 RBs.
US cotton shipments of previously booked orders are seen reaching between 200,000 and 250,000 RBs, from 212,800 RBs in last week's USDA data.
The USDA report is normally released on Thursday, but the report will be released on Friday due to Thanksgiving.
Brokers Flanagan Trading Corp sees resistance in the March contract at 53.20 and 54.05 cents, with support at 52.45 and 52 cents. Floor dealers said estimated final volume amounted to 7,000 lots, down from the prior tally of 13,405 lots. Open interest rose 21 lots to 89,118 contracts as of November 22.