Cotton futures settled lower on Wednesday on investor liquidation although losses were trimmed by possible consumer buying in the market, brokers said. The key May cotton contract lost 1.13 cents to end at 41.72 cents per lb, trading from 41.54 to 43.09 cents. July fell 1.02 cents to 42.63 cents.
Volume traded in the May contract was at 10,653 lots at 2:36 pm EDT (1836 GMT). Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said fibre contracts were hit by investor sales given the weakness in outside markets. But possible consumer buying showed up at the markets lows and this enabled fibre contracts to prune losses, Stevens and other analysts said. "It is assumed that the selling is connected to outside markets.
Cotton disappointed bulls yesterday when it ignored strength in the stock market and an impressively strong performance by the CRB (commodity) Index," a report by Stevens said. Looking toward the weekly export sales report from the US Agriculture Department due out on Thursday, cotton brokers said they expect total US cotton sales to range from 200,000 to 275,000 running bales (RBs, 500-lbs each), from 338,000 RBs in last weeks data.
US cotton export shipments are seen running from 200,000 to 250,000 RBs, versus 242,500 RBs last week. Further out, the trade will be looking toward the US Agriculture Departments annual potential plantings report due out on March 31.
Brokers Flanagan Trading Corp sees support in the May contract at 40.90 and 39.40 cents, with resistance at 41.85 and 42.75 cents. Volume traded Tuesday reached 12,686 contracts, from the previous tally of 10,287 lots, exchange data showed. Open interest in the cotton market was at 128,065 lots as of March 17, from the prior tally of 126,567 lots, it said.