Cotton futures settled softer Wednesday on speculative fund sales but losses were pared by the market's ability to hold its lows and a late rally in wheat values in Chicago, brokers said. ICE Futures' open-outcry March cotton contract slipped 0.38 cent to end at the day's high of 71.31 cents per lb, with the session low at 70.15 cents.
May cotton shed 0.47 cent to 73.03 cents. The new-crop December fell 0.45 cent to 79.43 cents. ICE March electronic cotton futures declined 0.64 cent to 71.05 cents at 2:49 pm EST (1949 GMT). "Cotton is holding unusually well with (most of) the grains down so sharply," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, said the "exhaustion" of selling pressure probably allowed the market to stay within a few points of unchanged. Both said it was tough to get a handle on the gyrations in cotton contracts and it may take a while for the fundamentals like lower US cotton plantings to catch up with what is happening in the ring. Analysts said the market will take a look at the weekly exports sales report from the US Agriculture Department to gauge the kind of demand the market is getting.
Cotton brokers said they expect total US cotton sales to range from 80,000 to 130,000 running bales (RBs, 500 lbs each), versus sales last week of 68,500 RBs. US cotton shipments of previously booked orders are seen around 200,000 RBs, from 192,700 RBs in last week's report.
Brokers Flanagan Trading Corp sees resistance in the March open-outcry cotton contract at 72.60 and 73.50 cents, with support at 71.25 and 70 cents. Open-outcry volume on Tuesday was at 10,855 lots and screen business was at 43,420 lots. Open interest in the cotton market increased 5,026 to 275,922 lots as of January 15, exchange data showed.