Cotton futures finished with small gains on Friday on buying by small investors in lethargic trade before a holiday weekend, analysts said. The US cotton market will be shut on Monday for Labour Day. The key December cotton contract on ICE Futures US rose 0.11 cent to close at $1.0589 per lb, trading from $1.0501 to $1.0705.
For the week, the contract traded in a range from $1.035 to $1.0723. Thomson Reuters data showed that since mid-August, the contract has traded at a low of $1.0174 hit on August 25 and a high of $1.09 set on August 24. Volume on Friday was over 7,700 lots, more than a third under the 30-day average, preliminary Thomson Reuters data showed. "We have gone nowhere all week," said independent cotton analyst Mike Stevens of Mandeville, Louisiana.
Cash business slowed abysmally as fibre contracts dipped to their lows for the day, following other markets down after the release early on Friday of weak US jobs data, traders said. Players said they were monitoring newly formed Tropical Storm Lee in the Gulf of Mexico even though reaction has been muted because its impact on fibre contracts is mixed. Rains from Lee would be welcome in southern Georgia because the area has been hit by a dry spell. But for cotton farms in Mississippi or Louisiana, cotton bolls are open and rain would harm fibre quality.
Stevens said players are now looking ahead to the US Agriculture Department's monthly supply/demand report on September 12, especially since most of the trade discounted the figure for US 2011/12 cotton production. "The September report could get us out of this trading range," Stevens said.
The market will also look at the USDA's weekly crop progress report next week to see how much damage Hurricane Irene inflicted on cotton plants in North and South Carolina, and Virginia. The level of investor interest in the cotton market hit 148,432 lots as of September 1, according to exchange data.