Cotton futures crumbled amid steady speculative sales to finish easier Monday and the weak performance meant prices may slide further after a brief holiday break, dealers said. The cotton market will be shut Tuesday for a holiday. Trading resumes on Wednesday.
The New York Board of Trade's benchmark December cotton contract shed 0.97 cent to conclude at 53.19 cents per lb, moving from 53.05 to 53.85 cents. The rest declined from 0.50 to 0.95 cent.
"It's been spec selling right out of the gate," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana.
The December contract managed to stay above 53.50 cents for most of the session until a late flurry of speculative and options-related sales dragged it down, dealers said.
The contract would need to regain a toehold above 53.50 cents and then gradually work its way toward the area around 54.35 cents to ensure that any further losses are behind it, they said.
Fundamentally, the focus of the market has turned to growing conditions in major cotton producers the United States and China where drought-like conditions have stressed cotton farms.
"A continuation of drought conditions through this summer as forecast by (the) NOAA (US National Oceanic Atmospheric Administration) may further erode the (US) crop size in spite of the higher area," said a report by Sharon Johnson, cotton expert for First Capitol Group in Atlanta.
Forecasters Meteorlogix said Texas will be mostly dry with scattered showers on Wednesday and then drier for the rest of the week.
Brokers Flanagan Trading Corp sees support in the December contract at 53 and 52.25 cents, with resistance at 53.55 and 54.75 cents. Floor dealers said estimated final volume reached 6,500 lots, versus the previous 28,915 lots. Open interest in the cotton market fell 508 to 160,069 contracts as of June 30.
Comments
Comments are closed.