Cotton futures closed softer Thursday on modest speculative and trade sales, with analysts saying the market seems unable to break out of its trading band.
The New York Board of Trade's May cotton contract shed 0.09 cent to close at 54.49 cents a lb, in a band from 54.48 to 55.10 cents. July slipped 0.03 to 55.78 cents, with the rest flat to off 0.16 cent.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said early speculative and trade buying ran the market to its highs for the session. "It fizzled ever since," Johnson said. "With no follow-through buying, we kind of eased off."
She said there seems to be solid trade support in the area near 54 cents in the spot May contract. But attempts to surmount 55.10 cents in May has run into stiff trade and speculative sales at that level.
Traders said the market may have received an early boost from the strong demand for the fibre in the weekly export sales report of the US Department of Agriculture.
USDA said total US cotton sales stood at 465,500 running bales (RBs, 500-lbs each), sharply up on trade belief it would reach between 250,000 to 350,000 RBs. Last week, sales hit 334,000 RBs.
US cotton shipments of previously booked orders hit 454,800 RBs, just above trade expectations of 400,000 to 450,000 RBs and shipments last week of 444,000 RBs.
Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said the strong sales and shipments data is a "graphic picture" of the demand every time the cotton market eased below 54 cents in the May contract.
The market's attention will turn in two weeks to the annual planting intentions report on March 31 by the USDA.
Brokers Flanagan Trading Corp put resistance in the May cotton contract at 54.70 and 55.10 cents, with support at 54.10 and 53.80 cents.
Floor dealers said final trading volume was estimated at 12,000 lots, down from Wednesday's count of 16,272 lots. Open interest rose 3,646 lots to 130,166 contracts as of March 15.