Cotton futures ended mixed Tuesday as fibre contracts retreated after hitting a two-month high this week although the overall tone of sentiment remained bullish, analysts said. The New York Board of Trade's open-outcry July cotton contract dropped 0.45 cent to settle at 54.30 cents per lb, moving from 53.95 to 54.55 cents.
Last Friday, the contract ended at 54.92 cents in the highest close for cotton since trading above 55 cents in early March. The now benchmark December cotton contract shed 0.08 cent to 59.10 cents. The rest ranged from up 0.10 cent to 0.40 cent lower.
IntercontinentalExchange's NYBOT electronic cotton market showed the July contract down 0.49 cent to 54.26 cents at 2:34 pm EDT (1834 GMT). "Everybody's looking for a correction, but it's giving ground grudgingly," said Mike Stevens, an analyst for brokers SFS Futures in Mandeville, Louisiana. "It's a bull market (but) there's nothing wrong if it has a couple of days of rest," he added.
Traders said attempts by the market to probe lower would often run into renewed buying by investment funds. "A lot of people are thinking China will be in here soon," one said.
Aside from the profit-taking which knocked futures back, the market also saw switch trade as players aggressively moved positions out of July before deliveries are posted on Monday. Open interest in July sank 7,043 lots to 19,829 lots as of June 18 while interest in key December rose 2,804 contracts to 146,459 lots.
Analysts said that once deliveries in July are under way, the market will turn its focus to the annual plantings acreage report coming from the US Agriculture Department on Friday, June 29. Broker Flanagan Trading Corp sees resistance in the July contract at 54.30 and 55.15 cents, with support at 53.95 and 53.05 cents.
Floor dealers said final estimated open-outcry volume stood at 10,000 lots, from the prior volume of 20,679 lots. Screen trade Monday was at 18,351 lots, NYBOT said. Open interest was at 207,176 lots as of June 18, down 2,863 lots from the previous session.
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