Cotton futures closed lower Wednesday on speculative sales and the market could fall further from the same players in the days ahead, brokers said. New York Board of Trade's key December cotton contract settled down 0.36 cent at 60.18 cents per lb after trading 60.01 to 61.20 cents. That was its lowest close since mid-June.
March cotton shed 0.38 cent to 63.70 cents, with distant months ranging 0.35 cent lower to 0.70 cent higher. On the IntercontinentalExchange NYBOT electronic market December cotton was down 0.34 cent at 60.20 cents at 2:32 pm EDT (1832 GMT), moving from 60.03 to 61.20 cents.
Frank Weathersby, an analyst for brokers Affinity Trading in Fort Walton Beach, Florida said speculative accounts were trying to nudge the market lower to see if automatic sell orders can be touched below 60 cents in December delivery.
The market lost ground at the start, got a boost from trade buying which hoisted contracts to session highs, and then slumped heading into the close, dealers recounted.
Analysts said most investors will wait for a government report on export sales to give near-term direction to the market. They projected US Agriculture Department's weekly export sales data would show total US cotton sales at 50,000 to 150,000 running bales (RBs, 500-lbs each), from sales last week of 88,850 RBs.
The brokers said US cotton shipments should reach between 250,000 and 300,000 RBs, from 378,000 RBs in last week's data. The trade was also looking at the potential path of tropical storm Erin, which formed in the Gulf of Mexico and could hit cotton areas in the southern coastal belt of Texas, the top cotton growing state in the country.
Brokers Flanagan Trading Corp put support in December cotton at 59.80 and 59.20 cents, with resistance at 60.50 and 61.30 cents. Open-outcry volume stood on Tuesday at 10,829 lots while screen business reached 16,758 lots. Open interest was 207,566 lots as of August 14, down 1,735 lots from the previous session.