Cotton futures settled mixed Monday in activity dominated by small speculators in quiet dealings, with the market seen staying in a band over the next few sessions, brokers said. The New York Board of Trade's key May contract eased 0.20 cent to end at 52.60 cents a lb, moving from 52.30 to 53.20 cents. July added 0.03 cent to 54.35 cents. Except for three contracts, the rest gained 0.10 cent.
"We were brutally quiet," said Keith Brown, president of commodity trading firm Keith Brown and Co in Moultrie, Georgia. He said attention in the ring was riveted on soaring crude prices which are fast approaching the psychologically important $60 a barrel level.
Cotton players are fretting that sky high energy prices may severely dent economic expansion and dent fibre consumption at a time when most producers like the United States are churning out large crops.
Futures popped higher at the opening bell, but most speculators were content to trade the market in a band, dealers said.
Investors were also beginning to transfer positions out of spot May and into the back months before the front contract goes into its delivery period on April 25.
Open interest in May fell 3,977 lots to 71,210 contracts as of April 1 while interest in July increased 2,220 contracts to 31,440 lots.
"Most of the activity today was in spreads, people rolling from May and into the back months," a broker said.
Analysts said the quiet tone of business may persist in the coming days, with the process of rolling positions from May expected to dominate business.
Most players will also monitor development of crops in the US and in China, both the world's largest producer and consumer of cotton.
Brokers Flanagan Trading Corp put support in the May contract at 52.50 and 51.70 cents, with resistance at 53.10 and 54.20 cents.
Floor dealers said estimated volume stood at 10,500 lots, down from Friday's tally of 17,713 lots. Open interest fell 1,154 contracts to 121,289 lots as of April 1.
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