US cotton futures finished flat on Friday, after two straight days of price swings, as investors reacted to developments from outside markets amid weak fundamentals for the fibre. Benchmark cotton for March delivery on ICE Futures US settled at 86.29 cents per lb, unchanged from Thursday.
The contract had risen 1.3 percent in the previous session, after falling 2.5 percent on Wednesday - reaching the lowest traded levels since the middle of August 2010 on spot continuation charts. "Cotton's been really swinging this week, with people reacting to what's happening in other commodities and the global economy, as there's very little fundamentally to watch in cotton," said a trader.
Commodities as a whole ended on Friday with their biggest weekly decline in two months, although gold and copper rallied for the day on the back of a weaker dollar and a continued improved outlook for the US economy versus Europe. Cotton's fundamental outlook is not being helped by the latest monthly supply/demand report from the US Agriculture Department, which forecast world 2011/12 cotton consumption at 111.34 million (480-lb) bales and production far ahead at 123.42 million bales.
Cotton prices began rallying in August 2010 due to tight supplies and robust demand, eventually hoisting cotton futures to their highest since the US Civil War in the 19th century. Prices peaked at $2.27 in March before starting a sharp decline.
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