Cotton futures settled fractionally lower Wednesday on investor sales as the trade cautiously eyed attempts to resolve the debt crisis in the United States and Europe in the days ahead, analysts said.The market is looking toward an EU summit on Thursday to ease the debt woes of Greece and is hopeful a compromise would avert a US debt default in August.
Brokerage Penson Futures senior cotton analyst Sharon Johnson said there is "some nervousness about the (EU) meeting" to talk of a debt crisis which could plunge global economies into another recession.
The key December cotton futures on ICE Futures US slipped 0.09 cent to conclude at $1.0075 per lb, trading from 97.82 cents to $1.0213. On Monday, the contract finished at 96.46 cents in the lowest close for the second-position contract since early October 2010, Thomson Reuters data showed. Business was light. Total market volume hit around 14,300 lots at 2:49 pm EDT (1849 GMT), about a quarter below the 30-day norm, Thomson Reuters preliminary data showed.
The short-covering seen in the preceding two sessions fizzled out during Wednesday's session although losses were pared by late covering in the market.
"(Investors) kind of let up on the pedal because there was no follow-through (buying)," Johnson said. World stocks, with the exception of Wall Street, and the euro gained Wednesday on guarded optimism a debt deal will be reached in Europe and the United States.
Traders said the market will also look closely at the weekly export sales report of the US Agriculture Department to gauge the level of demand for the fibre.
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