Cotton futures extended a losing streak to end Wednesday at a fresh three-week low and analysts are looking for signs the market may hold its lows and possibly stabilise over the coming sessions. The key December cotton contract fell 1.04 cents to finish at 75.29 cents per lb, dealing from 74.97 to 77.12 cents.
Based on the third position closing charts, it was the lowest close for cotton since June 10. Spot July cotton eased 0.66 cent to close at 68.12 cents. Volume traded in the December contract stood at 10,955 lots at 2:37 pm EDT (1837 GMT).
"All we are looking for now is stability," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana. He said investors would need to see if the December contract begins to see commercial support overnight to lend some stability in fibre contracts.
"Today's low is the middle of the 74-76 (cents, basis December) downside target many technicians have been using as well as (an) area some commercials anticipate could spark pick up in export inquiry," said Stevens. Cotton brokers are looking toward the weekly export sales report from the US Agriculture Department being released on Thursday.
The brokers said they expect total US cotton sales at 25,000 to 75,000 running bales (RBs, 500-lbs each), from sales last week at 29,000 RBs. They said US cotton shipments of previously booked orders should reach around 300,000 RBs, against shipments in last week's report of 286,600 RBs.
Brokers Flanagan Trading Corp sees support in the December contract at 75.25 and 74.40 cents, with resistance at 76 and 76.85 cents. Volume traded Tuesday hit 25,776 lots, exchange data showed. Open interest in the cotton market rose 2,139 lots to 217,590 lots as of July 1, exchange data showed.