Cotton futures settled marginally higher on Monday in thin trade as the market awaited Friday's release of a government crop report, analysts said. Key March cotton futures gained 0.38 cent to finish at 92.22 cents per lb, moving from 91.54 to 92.80 cents. That was not too far from the Friday band of 90.92 to 92.27 cents.
Volume traded Monday stood at around 7,700 lots, nearly two-thirds below the 30-day average, according to ICE Futures data. "It's absolutely agonising," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana. "The market's continuing to consolidate right in this area." Traders said the market will likely drift until release on Friday of the US Agriculture Department's monthly supply/demand report.
USDA is expected to reduce its estimate of US 2011/12 cotton production and of US 2011/12 cotton exports. USDA had forecast US 2011/12 cotton production at 16.3 million (480-lb bales) in its November supply data, from 16.61 million bales in its preceding month.
Fiber contracts could also drift right through the year-end holidays, with a pickup in business anticipated by early next year when the next round of mill buying picks up.
Open interest in the cotton market, usually taken as an indicator of investor exposure in the market, came to 137,826 lots on Friday, from the prior session's 137,741 lots, exchange data showed. Volume traded Friday reached 7,901 lots, ICE Futures US data reported.