Cotton futures ended down and near a 9-month low Monday on investor liquidation on a stronger dollar and jitters over the effects the eurozone debt crisis will have on economic growth and fibre demand, brokers said. The key December cotton futures on ICE Futures US fell its 5.00-cent daily limit to end at $1.0888 per lb, with the session top at $1.138.
It was the lowest close for the second position cotton contract since mid-October 2010, Thomson Reuters data showed.Volume traded stood almost 9,000 lots at 2:44 pm EDT (1844 GMT), over 50 percent below the 30-day norm, Thomson Reuters preliminary data showed. "We're overpriced and there's no business," said Jobe Moss, an analyst for brokers and merchants MCM Inc. He added that cotton stumbled along with most of the commodity complex due to the stronger dollar and the "concerns about what is going on in Europe."
Global stocks dropped and the euro sank Monday as worries that Italy could become the latest country caught up in the eurozone debt crisis caused investors to snap up safe-haven US Treasury debt. Analysts said market players were looking toward a pair of government reports.
The fist would be the US Agriculture Department's weekly crop progress report due out later on Monday and then the USDA's monthly supply/demand data on Tuesday. Traders said there may be some adjustments in the USDA's supply data but many market players would turn their attention to the August report when the first detailed survey-based projections become available for the cotton market.
Traders said the market is still monitoring conditions in Texas and the debate in the trade will now turn to how much of the US cotton crop would be harvested in the fall. Heavy rains brought some relief to drought-stricken Texas over the last week, but more is needed to help the region escape the historic that has gripped the area for months. Open interest in the ICE futures cotton market stood at 139,310 lots as of July 8, ICE Futures US data showed. Volume traded on Friday stood at 10,095 lots, it added.