Cotton futures ended mostly lower Friday on switch trade as players moved positions from the spot contract and into the back months, with future market direction to be dictated by growing conditions in the US cotton belt, brokers said.
The New York Board of Trade's July cotton contract shed 0.37 cent to close at 52.07 cents per lb, trading from 51.47 to 52.50 cents. New-crop December rose 0.02 to 57.70 cents, trading from 56.60 to 57.75 cents. Two contracts aside, the rest declined 0.03 to 0.37 cent.
Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said cotton came under pressure as players rotated positions in July to the back months like the new-crop December contract.
Open interest in July fell 6,552 to 39,690 lots as of June 15 while interest in December gained 3,598 to 103,916 lots. July goes into delivery on June 26.
Stevens said losses in the cotton market were trimmed when trade and suspected consumer buying showed up at the lows.
Analysts said the trade will be monitoring the weather in places like Texas, the top growing state in the country, over the weekend.
Meteorlogix predicted there could be some isolated thunderstorms in Texas and the US Southwest through the weekend and into Tuesday.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, said in a report that government forecasters believe "large sections encompassing the Plains, from Texas to the Dakotas, remain in various stages of drought as do most of the Mid-South and Southeast."
She added, "Not only has the weather been less than ideal this spring, it has been harmful in some instances with more of the same likely."
Brokers Flanagan Trading Corp put resistance in the July contract at 52.15 and 52.30 cents, with support at 51.65 and 51.10 cents. Floor dealers said estimated final volume at 28,000 lots, versus the previous 28,339 lots. Open interest in the cotton market fell 2,484 to 173,670 contracts as of June 15.