Cotton futures settled easier Thursday on combined fund and speculative sales and the market may probe lower before running into some support at a key technical level, analysts said. The New York Board of Trade's key December cotton contract slid 1.16 cents to finish at 62.79 cents per lb, moving from 62.65 to 64 cents.
March eased 1.12 to 65.93 cents. The rest lost from 1.00 to 1.25 cents. The IntercontinentalExchange NYBOT electronic cotton market saw the December cotton contract fall 1.17 to 62.75 cents at 2:30 pm EDT (1830 GMT), moving from 62.65 to 64.01 cents.
Sharon Johnson, cotton expert of First Capitol Group in Atlanta, Georgia, said the market may "push on down a little bit more" and possibly test 60 cents in the December contract. But there seems to be a lot of support there and the market may rebound after testing that region, she said. Traders said the market continued to follow a seasonal pattern where it would lose ground going into a key government crop report next month.
The US Agriculture Department will be releasing its monthly supply/demand report, the first detailed outlook for the August/July 2007/08 marketing year. Fiber contracts lost ground at the start, fought back and then gradually lost ground due to speculative fund selling in the market, dealers said.
The market paid little heed to the USDA's weekly export sales report since it came out near the end of the 2006/07 marketing year. USDA said total US cotton sales reached 116,700 running bales (RBs, 500-lbs each), from 143,300 RBs in last week's report. US cotton shipments of previously booked orders stood at 450,300 RBs, from 437,700 RBs last week.
Cotton brokers had been expecting total US cotton sales to range from 70,000 to 120,000 running bales RBs. They expected shipments to hit 400,000 to 500,000 RBs.
Broker Flanagan Trading Corp sees support for the December contract at 62.75 and 62 cents, with resistance at 63.60 and 64.25 cents. Open-outcry volume on Wednesday stood at 2,639 lots while screen business reached 7,352 lots. Open interest in the cotton market was at 211,237 lots as of July 25, down 1,471 lots from the previous session.