Cotton futures ended a tad higher in quiet trade on Wednesday, as investors stayed on the sidelines awaiting trading cues from a US government monthly crop report. New York cotton for December delivery inched up 0.26 cent to settle at 72.10 cents per lb on ICE Futures US, with trading volume at 40 percent below its 250-day average, preliminary Reuters data showed.
The benchmark contract traded in a range from 71.66-72.31 cents, finding resistance just above its 100-day moving average at 72.36 cents. The cotton market was awaiting the US Department of Agriculture's (USDA) monthly report due on Thursday for any signs of damage to new crops in west Texas, the major US growing region, after recent wet weather. Analysts, however, said that cotton will likely to rangebound until selling related to the year-end harvest of this year's crop subsides.
"What will have more of an impact on cotton will be that when we start getting the acreage estimates for next year," said Shawn Hackett, president of Florida-based Hackett Financial Advisors. Cotton prices tend to bottom toward December when top suppliers including the United States, India and China start planting next year's crop, Hackett said.
Year to date, cotton prices were down almost 20 percent due to oversupply and weak demand amid a global economic slowdown. Analysts said it may be too early, however, for the USDA to adjust its output forecasts, yet any cuts due to wet weather are unlikely to dent the global record inventory of over 76 million bales in the current season to end-July 2013 either.
China, which is the world's biggest producer and consumer of cotton, is expected to harvest 6.9 million tonnes of the fibre this year, a decline of 4.2 percent from a year ago due to a smaller sowing area, an official from the country's top planning agency said in remarks.