US cotton futures settled a shade lower on Friday after being dominated by position-squaring indicating demand for nearby cotton supplies, traders said. "It was a remarkably uneventful day, except that the December cotton contract went up over March, after being initially down earlier this week," said Mike Stevens, an independent cotton analyst in Mandeville, Louisiana.
The position-squaring came despite the S&P GSCI's monthly "roll" which compelled those tracking the commodities index to sell the soon-to-expire benchmark December and buy March, the market's second-month position. "The fact December prices inverted again despite the GSCI roll shows there are merchants prepared to take delivery of nearby cotton," Stevens said.
The key December cotton contract on ICE Futures US settled down 0.26 cents, or by 0.3 percent, at 99.24 cents per lb, moving from 99.99 to 98.42. The contract goes off the board on December 7. March cotton finished down 0.85 cents, or 0.9 percent, at 98.04 cents.
Cotton's weaker performance also bucked the broader rise in oil and other commodity prices as the dollar fell. Volume in cotton was, however, above average, with preliminary data from Thomson Reuters showing nearly 24,000 transacted - about 35 percent above the 30-day norm.
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