US cotton futures settled mixed on Wednesday after investors sold the front-month contract and bought longer-dated positions to speculate on the further end of the fibre market. The key July cotton contract on ICE Futures fell 0.23 cent, or 0.3 percent, to close at 81.84 cents per lb, trading between 81.76 and 82.90 cents.
But the October and December cotton contracts on the exchange both closed up about 1 percent each, benefiting from the fund flow coming out of the front-month. "It was basically a play of old crop versus new crop," said Sharon Johnson, senior cotton analyst at First Capitol Group in Atlanta. "Speculators were rolling their long positions in July - which is the old crop but also the contract that has the most volume - into December and the other months."
December cotton settled up 0.78 cent, or 1 percent, at 78.93 cents per lb. October rose 0.62 cent, or 0.8 percent, to finish at 78.15 cents a lb.
Outside of cotton, commodities rose broadly as risk appetite returned to markets trammelled just a day ago by the prolonged European crisis. Crude oil, another industrial commodity like cotton, jumped nearly 4 percent in New York, scoring its biggest gain in over three months.
Investors are awaiting weekly export sales and shipment numbers on US cotton, expected from the US Department of Agriculture on Thursday. On the average, analysts and traders surveyed by Reuters are betting that USDA will peg weekly export sales at 360,000 running bales and shipments at 270,000 running bales. Volume traded in ICE cotton on Tuesday reached 20,271 lots, up from 12,972 lots on Monday, according to ICE Futures. US Open interest in the cotton market came to 189,973 lots versus 190,305 lots as of May 24, the exchange said.
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