US cotton futures closed lower on Tuesday on light investor sales as the market remained trapped in a range, with many big investors expected to stay away for the rest of the year, analysts said. The key March cotton contract on ICE Futures US fell 1.41 cents to finish at $1.4435 per lb, moving from $1.44 to $1.4949.
-- Trading volume seen among lowest of 2010
Volume was seen at 7,000 lots, Thomson Reuters preliminary data showed. That would be just above the year low of 5,895 lots traded on June 25, according to exchange data. Cotton is the third-best performer in the Reuters-Jefferies commodity index so far this year, up over 76 percent as the market reached levels not seen since the US Civil War in the 19th century.
"We appear to be in a $1.40-$1.50 trading range," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana. "There's nothing driving it." Many large investors will not return to the market until after the New Year, he said. Those who remain are content to maintain or defend their outstanding positions in fibre contracts.
Cotton prices in China fared marginally better, with the May cotton futures on the Zhengzhou Commodity Exchange last traded at 27,745 yuan per tonne, up 85 yuan on the day. Analysts said the market's subdued tone may persist into early next month because many players will be attending annual industry meetings in Atlanta, Georgia, in January as well as in San Antonio, Texas, in February.
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