Cotton futures settled easier on Thursday on speculative liquidation to scuttle a brief recovery in the market, with brokers saying the failure could nudge the market lower into next week. ICE Futures open-outcry March cotton contract dropped 0.89 cent to close at 65.04 cents per lb, moving from 65 to 65.70 cents.
The rest ranged from 0.95 cent lower to 2.10 cents higher. The ICE March electronic cotton contract slid 0.98 cent to 64.95 cents at 2:56 pm EST (1956 GMT), dealing from 64.87 to 66.19 cents. Jobe Moss, an analyst for brokers and merchants MCM Inc in Lubbock, Texas, said investment funds were still holding long positions in the market and have apparently decided to "get out."
Traders said the inability of the market to climb back over 66.10 cents, basis March, discouraged speculative accounts who had sparked the market on Wednesday. Cotton futures have now lost ground in most of the last 15 sessions. "Once it failed over 66 (cents), you could almost sense the retreat coming," a dealer said.
The market took note of the weekly US Agriculture Department's export sales report showed US cotton sales at 266,400 running bales (RBs, 500-lbs each), against last week's 239,700 RBs and trade expectation it would range from 250,000 to 400,000 RBs.
US cotton shipments of previously booked orders hit 174,500 RBs, against 197,800 RBs last week and trade belief it would hit from 180,000 to 250,000 RBs. The next bit of data which will become the focus of the market will be the monthly supply/demand report from the US Agriculture Department being released December 11 which will contain an update on global market conditions.
Brokers Flanagan Trading Corp sees resistance in the March open-outcry cotton contract at 65.20 and 66 cents, with support at 64.55 and 63.70 cents. Open-outcry cotton volume Wednesday was at 4,700 lots and screen trade at 16,586 lots. Open interest in the market rose 476 lots to 209,646 lots as of November 28, according to exchange data.