New York cotton futures dip

US cotton futures finished with more than 1 percent declines on Friday, but brokers said the selling was primarily profit taking ahead of a long holiday weekend. The US cotton market, along with other commodity and financial markets, will be closed on Monday for the US President's Day holiday. The nearby March contract also lost ground to players exiting their positions as the February 23 delivery date approaches.
"People were taking profits ahead of the long weekend. There's not a lot out there in the news," said Bill Raffety, senior analyst for futures brokerage Penson Futures. March cotton on ICE Futures US lost a penny, or 1.08 percent, to stand at 91.45 cents per lb at the close. Prices spanned 91.31 to 93.27, and fell to their lowest since Tuesday. March volume came to 6,797 lots as more players exited their positions ahead of the delivery period for the contract.
New benchmark May futures finished at 92.65 per lb, a 1.06 cent, and 1.13 percent, loss. The range extended from 92.39 to 94.29, but the low held within the parameters of an uptrend line that began at the December 15 low. May volume came to a healthy 13,205 lots just after the exchange session ended.
May's open interest continued to climb and was nearly quadruple that of March, as participants rolled out of the nearby contract into later-dated issues. On Thursday, open interest in March futures slid by 7,136 to 21,215 lots. But, open positions in May futures jumped by 3,589 to 83,316 lots.
"We've advanced quite a bit since the 10th and I think today was just profit taking," he added. Also, a number of foreign buyers came in the market after prices decline last Thursday. But the buying this week has driven cotton back up to levels where it starts to dry up.
"When it broke down to 90 cents you saw some people come in and buy (cotton). But, there's not that much interest above 93 to 94 cents," said Raffety. Open interest in cotton, an indicator of investor exposure in the market, declined by 3,683 lots to 182,458 lots as of February 16 ICE Futures US data showed. On Thursday, trading volume tumbled by 10,603 lots to 19,994 lots from Wednesday's tally, exchange data showed.