Cotton futures hit their highest levels in more than seven months on Monday, boosted by strong sales of US cotton that have attracted speculative buying, before turning lower after commercial players took advantage of the high prices to sell.
"(The) trade came in and sold the market at day's end as soon as they saw the buying dry up," said Avery Putter, senior options broker at Sweet Futures in New Jersey.
Cotton contracts for July settled down by 0.11 cent on Monday, a 0.2 percent loss, at 66.23 cents per pound. It traded within a range of 65.88 and 67.50 cents a pound, the highest level for the second-month contract since September 15, 2014.
The front-month switched to a premium over the second-month, ending the session with a backwardation of 0.08 per pound. It was the first notice day for front-month May cotton.
Total futures market volume rose by 4,579 to 29,154 lots. Data showed total open interest gained 3,239 to 174,566 contracts in the previous session.
Certificated cotton stocks deliverable as of April 24 totalled 73,660 480-lb bales, up from 72,131 in the previous session.
The dollar index was down 0.22 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 0.04 percent.
Speculators cut their net long position to 23,056 contracts from 38,775 in the latest week. Relative Strength Index in the most-active contract fell to 60.943.