Cotton futures settled lower on Monday on speculative sales after a holiday break, and analysts said heavy deliveries weighed on the spot contract in the market. The market was shut Thursday and Friday for the Thanksgiving holiday.
ICE Futures open-outcry March cotton contract dropped 0.62 cent to finish at 64.92 cents per lb, moving from 64.90 to 65.75 cents. Three contracts aside, the rest fell 0.15 to 1.46 cents. The ICE March electronic cotton contract declined 0.55 to 64.99 cents at 2:51 pm EST (1951 GMT), dealing from 64.90 to 65.92 cents.
"The market's ignoring outside (positive influences). The market is so sick it cannot even raise its own head," said Keith Brown, president of commodity firm Keith Brown and Co in Moultrie, Georgia.
He said the spot December contract suffered the most after Allenberg was said to be the main deliverer of cotton in the delivery period with some 1,400 of the 1,643 lots posted in the exchange. "What does that say about demand" if a major merchant gave up cotton, an analyst said, adding the sizeable deliveries meant that consumption is not as strong as people were expecting.
Analysts said the weak tone in the spot December cotton contract spread and pressured the other fibre contracts. While the trade keeps an eye on deliveries, the market's attention will soon turn to the monthly supply/demand report from the US Agriculture Department due on December 11.
The market took note of the weekly US Agriculture Department's export sales report released on Friday which showed total US cotton sales at 239,700 running bales (RBs, 500-lbs each), from last week's 169,100 Rbs.
The brokers said US cotton shipments hit 197,800 RBs, from 188,500 RBs in last week's report. Open-outcry cotton volume Wednesday was at 9,385 lots and screen trade at 20,562 lots. Open interest in the market sank 5,799 lots to 212,736 lots as of November 21.