Cotton down slightly on thin trade
New York-traded cotton ended slightly lower on Monday after a lack of a compelling factors limited trades by market participants, dealers said. "Today's volume was one of the lightest I've seen in weeks," said Sharon Johnson, senior cotton analyst at KCG Futures in Roswell, Georgia. "People are probably regrouping after last week's heavy activity, moving sideways until they get news to trade on."
Copyright Reuters, 2014
The benchmark May cotton contract on ICE Futures US settled down 0.16 cent, or 0.2 percent, at 92.19 cents a lb. Volume was below 8,300 lots, about 65 percent below the 30-day average, preliminary data from Thomson Reuters showed. May cotton rose 1.3 percent last week to book a second straight weekly gain on strong buying by mills.
While a tighter crop outlook by the USDA has bolstered cotton futures, the fibre's higher prices in the marketplace have crimped demand from key buyers, weekly export and sales data issued last Thursday showed. Exchange inventories of US cotton are at around their highest levels since July, according to most recent ICE data compiled by Reuters. Global supplies have ballooned due to a government stockpiling program in top consumer China.
Beijing is expected to overhaul the controversial policy this year, a move expected to cut demand for imports and weigh on world prices. A Reuters poll on Friday showed West African cotton growers will boost output 19 percent in the 2014/15 crop year that begins on August 1.