NEW YORK: Cotton steadied on Thursday as concerns over deteriorating crop quality and bets for a smaller US crop in the next week's federal supply demand data countered pressure from positions rollover from the front-month contract.
The cotton contract for December was unchanged at 70.25 cents per lb by 1:07 p.m. EST (1807 GMT), after rising to its highest since Oct. 28 at 70.94 cents.
"We are picking up losses in the crop due to adverse weather over the past two weeks and are thinking that the WASDE report is going to show that there is a smaller US crop," said Louis Barbera, partner and analyst at VLM Commodities Ltd.
However, "we are in the process of selling December (contract) and buying March for all the longs and that is going to naturally keep a small lid on prices."
The US Department of Agriculture's (USDA) World Agricultural Supply and Demand Estimates (WASDE) report is due on Nov. 10. Monday's weekly crop progress data showed that only 37% of the crop was in good/excellent condition, for the week ended Nov. 1.
On the US election front, Democrat Joe Biden edged closer to victory over President Donald Trump, with Biden expected to push for larger economic stimulus.
The USDA's weekly export sales report showed net sales of 115,600 running bales (RB) for 2020/21, down 60% from the last week, but showed decreases of 38,300 RB for China and 44,100 RB for Bangladesh.
Exports of 270,000 RB were up 18%, the report showed.
"US export sales were below expectations, but still decent. Cancellations once again put a bit of a damper on the numbers," said Peter Egli, director of risk management at British merchant Plexus Cotton.
"The market is going to remain range-bound in a 68-72 cents window."
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