NY cotton settles easier but above session low

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NEW YORK: Cotton futures closed easier Wednesday on technical selling by investor sales for the second straight session, and analysts said momentum pointed to more losses over the next few days.

Benchmark March cotton on ICE Futures US fell 1.26 cents, or 1.2 percent, to settle at 96.92 cents per lb after trading from 98.05 to 94.59 cents which marked the lowest since Jan. 13.

The contract had been on a steady uptrend that began after it hit a 17-month low on Dec. 14.

Volume traded on Wednesday amounted to about 23,600 lots, more than 50 percent over the 30-day norm, according to preliminary Thomson Reuters data.

“The market was overdone. It’s overbought,” said Jobe Moss, an analyst for brokers and merchants MCM Inc. in Lubbock, Texas.

Traders said March could eventually test downside targets at 94.52 cents which was the Jan. 13 low, the Jan. 12 low of 94.13 and then the Jan. 9 low of 93.22 cents.

But the dealers said that every time cotton drops sharply, support emerges in the form of trade buying that prunes losses. “That’s what we got again today,” one said.

Fundamentally, the market has derived strength from buying by China, the world’s leading consumer of cotton, for its textile and apparel industry.

As a result, the trade awaited the weekly export sales report of the US Agriculture Department, due Thursday at 8:30 a.m. EST (1330 GMT).

Open interest, an indicator of investor exposure, stood at 165,008 lots as of Jan. 24, up for the 10th session and posting a rise of almost 8.5 percent this year.

Tuesday’s volume stood at 23,626 lots, ICE Futures US data showed.

Source: http://www.brecorder.com/markets/commodities/18-markets-commodities/43590-ny-cotton-settles-easier-but-above-session-low-.html

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