ICE cotton futures fell for the third straight session on Wednesday, hitting their lowest levels in more than three weeks, as harvest activities progressed in US growing regions and index funds shifted long positions forward from the front month.
"We've got a lot of cotton starting to come into the pipeline, and there's going to be more on the way," said Jobe Moss, a broker with MCM Inc in Lubbock, Texas. The December contract shifted to its first discount to the March contract since mid-August, marking a return to a market condition known as contango as nearby supply increased due to the harvest and funds sold December positions.
The spread between the two contracts widened to as much as 0.08 cent for the steepest contango since June. December cotton on ICE Futures US settled down by 0.63 cent on Wednesday, a 1 percent loss, at 61.94 cents per pound, after trading as low as 61.80, the lowest level since October 13. Total futures market volume rose by 11,265 to 43,686 lots. Data showed total open interest fell 379 to 199,327 contracts on Tuesday. Certificated cotton stocks deliverable as of November 3 totalled 42,352 480-lb bales, down from 43,216 on Monday. The dollar index was up 0.77 percent. The Thomson Reuters CoreCommodity CRB Index, which tracks 19 commodities, was down 1.73 percent.