NY cotton settles easier as outside markets weigh

NEW YORK: Cotton futures finished easier on Friday on investor sales inspired by turmoil in outside markets, although worries over crop problems in several countries pared losses, analysts said.

European stocks slid while US stocks see-sawed, with gold scaling record highs and other commodities climbing on the dollar's weakness.

The key December cotton contract on ICE Futures US fell 0.73 cent to finish at $1.0622 per lb, moving from $1.0839 to $1.0513.

On the week, the market was up almost 1.00 percent.

Trading volume totaled more than 8,600 lots, over 50 percent below the 30-day norm, Reuters data showed.

"Outside markets seem to have more of an impact" in cotton than any other factor at the moment, said senior cotton analyst Sharon Johnson of commodities brokerage Penson Futures in Atlanta, Georgia.

She said cotton's performance next week would depend on the macroeconomic environment, "especially if there are no more implosions" in the economic arena.

Fundamentally, cotton is supported by bullish factors such as market talk of losses of up to 400,000 (480-lb) bales of cotton from rains in Pakistan, a hot summer and limited irrigation in former Soviet countries such as Uzbekistan, and heavy rains in some cotton-producing areas of No. 1 producer and consumer China.

On Monday, the market will look toward release of the US Agriculture Department's weekly crop progress report to gauge the condition of the US 2011/12 cotton crop.

Open interest in cotton futures was at 143,900 lots as of Aug. 18, compared to the 140,442 lots on Aug. 11, which was then the lowest level in over two weeks, ICE Futures US data showed.

Total volume traded on Thursday hit 14,682 lots, up from the Tuesday level of 7,113 lots, which was the lowest level of business since May 23, ICE Futures US data showed.

Copyright Reuters, 2011