Cotton futures finished lower Monday on speculative fund sales caused by a sell-off in other markets, but trade buying pared losses and players now await a US government crop report this week, brokers said. New York Board of Trade's May cotton contract closed down 0.84 cent at 53.05 cents per lb after dealing from 52.90 to 53.70 cents.
Back months shed 0.73 to 0.80 cent. The IntercontinentalExchange's NYBOT electronic market for cotton showed the May contract sliding 0.74 cent to 53.15 cents by 2:33 pm EST (1933 GMT), dealing 52.90 to 54 cents.
"We just kind of followed the rest of the world down," said Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia. But Johnson said the market received some support at the session lows and fibre contracts may drift in the days ahead to wait for Friday's release of the monthly supply/demand report from the US Agriculture Department.
"The market came under pressure from index selling," a dealer said, alluding to the falls in commodity indexes on Monday. "Those guys are down a bundle and that is putting pressure on cotton too." The market will be closely monitoring China, the world's top importer of cotton and where the current financial turmoil first erupted last week.
Down the road, the trade will be aiming toward the USDA's release of its annual potential plantings report for grains and cotton on March 30. Cotton sowings are seen by trade dropping sharply in 2007 due to robust advance in corn values due to rapidly expanding demand for the alternate fuel of corn-based ethanol.
Brokers Flanagan Trading Corp sees resistance in May cotton at 53.30 and 53.75 cents, with support at 52.80 and 52.10 cents. Floor dealers said final estimated cotton volume in open-outcry stood at 9,200 lots, up from Friday's tally of 6,145 contracts. NYBOT said electronic trading volume Friday amounted to 3,120 lots. Open interest rose 1,405 lots to 204,871 lots as of March 2.