ICE cotton futures fell the most in nearly a month on Monday alongside a broad-based commodities sell-off and technical pressure after prices failed to surpass key resistance. The bellwether Thomson Reuters CoreCommodity CRB Index hit a two-week low. Both millers and farmers remained on the sidelines, as investors liquidated long positions after prices met key resistance for a second straight session, sending the front-month to its biggest daily loss since September 22.
Speculators built up their net long stance in fibre in the most recent reporting week, government data showed on Friday. "We failed again at the 64-cent resistance level," said Peter Egli, director of risk management at British merchant Plexus Cotton. That level is "a bit too expensive for the mills," Egli said. Still, prices were supported by expectations of lower supplies in key producers like the United States than previously expected, due to unfavourable weather during the harvest.
The ICE cotton contract for December settled down 0.61 cent, or nearly 1 percent, at 63.24 cents per lb. It traded within a range of 62.96 and 64.07 cents a lb. Certificated cotton stocks deliverable as of Friday totalled 43,319 480-lb bales, up from 42,922 in the previous session. The dollar index was up 0.44 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 1.36 percent. Speculators raised net short position to 29,726 from 18,953 in the latest week.