Cotton futures closed lower Thursday on sales by small speculators in subdued business and the market may drift until it receives more news whether top consumer China will shake off a recent round of economic turmoil, brokers said.
The New York Board of Trade's May cotton contract shed 0.12 cent to end at 53.70 cents per lb, trading a tight range from 53.50 to 53.89 cents. It was almost an inside day since Wednesday's band ran from 53.10 to 53.83 cents. One contract aside, the rest fell 0.18 to 0.35 cent.
The IntercontinentalExchange's NYBOT electronic market for cotton showed the May contract down 0.14 cent to 53.68 cents at 2:30 pm EST (1930 GMT), dealing from 53.50 to 54 cents.
Frank Weathersby, an analyst for brokers Affinity Trading in Fort Walton Beach, Florida, said activity in the cotton pit was deflated by the fact that investors were going into other, more active markets.
"All the others have greater volatility," he said. The market will be waiting for the situation to settle down in China, where a collapse in equity prices sparked a global sell-off, especially since it is the world's biggest consumer of cotton.
The market derived little, if any, inspiration from a weekly government export sales report. The US Agriculture Department's weekly report showed US cotton sales at 164,400 running bales (RBs, 500-lbs each), from 415,000 RBs last week and trade belief it would range from 150,000 to 300,000 RBs.
US cotton shipments of previously booked orders reached 208,900 RBs, from 232,300 RBs in last week's report. Next week, the trade will be looking at the monthly supply/demand report from the USDA and then its annual potential plantings data at the end of the month.
Brokers Flanagan Trading Corp see resistance in May cotton at 53.75 and 54.35 cents, with support at 53.30 and 52.80 cents. Floor dealers said final estimated cotton volume in open outcry stood at 16,000 lots, from the prior tally of 16,570 contracts. NYBOT said electronic trading volume Wednesday was at 2,800 lots. Electronic trading ends at 3:15 pm.
Open interest in the cotton market rose 821 lots to 202,169 lots as of February 28.