ICE cotton fell for a fifth straight session in actively traded months on Friday and notched its biggest weekly loss in a year as speculative investors continued to exit their bullish bets as concerns waned about tight supplies. The benchmark December cotton contract on ICE Futures US fell as much as 1.2 percent to 84.32 cents per lb, its lowest in a week and a half. It settled down 0.72 cent, or 0.8 percent, at 84.64 cents per lb, in the last session ahead of the notice period for July deliveries.
-- July ends higher ahead of first notice day for deliveries
-- Market awaiting USDA plantings data June 28
Prices soared to more than 90 cents in the July contract last week, the highest since March, as one or several merchants bought July, betting on short supplies ahead of the US harvest in December. The market has since dropped nearly as quickly as it rallied as the concerns about tight supplies evaporated, traders said. That "set the stage for an outright price collapse this week" said INTL FCStone analysts.
Fibre ended the week down over 5 percent, its worst weekly performance since the end of May last year, and below all major short- and long-term moving averages. It underperformed the broader market, which was hammered by bleak Chinese data and plans by the US Federal Reserve to cut stimulus efforts. The 19-commodity Thomson Reuters-Jefferies CRB index finished the week down 2.8 percent for its sharpest weekly decline since October. Recent rains in Texas, the biggest producing US state and hard hit by drought, have also eased concerns about upcoming supplies in the world's top exporter of cotton.
Market participants expect prices to recover next week ahead of the US Department of Agriculture's planting report on June 28. Farmers are expected to have planted one of their smallest crops in decades as they have switched to higher priced grains. "Next week should see less of a decline in front of the planting report due out next Friday," said Knight Futures cotton specialist Sharon Johnson.