Cotton futures settled softer Friday on investor sales although trade buying enabled the market to hold its lows for the day while the trade mulled the market's next move, brokers said. The December cotton contract in New York eased 0.12 cent to end at 58.63 cents per lb, trading from 58.53 to 60.34 cents.
Volume in the December contract was at 6,207 lots at 2:42 pm EDT (1842 GMT). March cotton shed 0.07 cent to finish at 61.12 cents. Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana, said that every time cotton futures slid to their lows for the session, "the possibility of trade buying" would stop the market from losing further ground.
But business was very light and subdued for the most part. Jack Scoville, an analyst for brokers The Price Futures Group, said in a report that "no one seems ready to sell too much until more is known about the actual crop size" of the US cotton harvest. "Mills do not seem interested in buying now, but are thought to be ready to move if prices fall further. Current weather forecasts call for mostly favourable growing conditions to continue. Charts show that trends turned mixed for the short term," he said.
A report by Sharon Johnson, cotton expert for First Capitol Group in Atlanta, Georgia, added: "The December contract is down 237 points from last Friday and given the break in the past five business days, a respite may be in order but the sideways move Tuesday-Thursday is a bit unnerving." She concluded that the market must "be prepared for a 2.00 cent move in either direction in the next few hours/days with a knee-jerk of the same magnitude shortly thereafter."
Brokers Flanagan Trading Corp pegged resistance in the December contract at 58.75 and 59.60 cents, with support at 57.90 and 57 cents. Total cotton volume traded Thursday reached 5,944 lots, from the previous 7,187 lots, exchange data showed. Open interest in the cotton market hit 126,868 lots as of August 20, from the previous 127,412 lots, ICE Futures US said.