Specs switch to cotton net long; cut coffee, cocoa shorts

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March 30 (Reuters) – Speculators switched to a net long position in cotton futures and options on ICE Futures U.S. for the first time in five weeks betting on nearby supply tightness, U.S. Commodity Futures Trading Commission data for the week to March 28 showed on Friday.

The cotton net long was 3,266 contracts, after a net rise of 11,050 contracts on the week. The move to bet on higher prices coincided with a run-up in prices. The benchmark May contract on ICE Futures U.S. to 7 percent to 94.08 cents per lb on Wednesday from last Thursday.

Concerns are mounting that an export ban in India, rising exports from the United States and an absence of delivered exchange-certified material will tighten supply, he said. That was reflected in the return of the backwardation in the July-December spread, peaking at 3.28 cents on Wednesday.

“Speculators have realized things were getting tight going into the season. Most of the strength (in prices) has been in the current crop,” said Mike Stevens, independent cotton analyst based in Mandeville, Louisiana.

“Focus this week was on exports, planting intentions and spreads….The tightness has been int he nearby.”

The backwardation eased to 2.5 cents on Friday after higher-than-expected plantings data from the U.S. Agriculture Department.

In sugar, speculators raised their net long position by 2,286 contracts to 82,956. The long wons out in the overall total, with almost 9,000 contracts added, but shorts were also active with over 6,500 contracts.

The resulting net increase built on the rise of more than 30,000 contracts of the previous week and takes the net long to a four-week high.

Speculators have been betting on higher prices amid talk that Brazil’s crop will fall short of expectations even as traders have warned that the buying has been overdone and the market is due a correction.

Prices did come off slightly in the week to March 28 – the spot May raw sugar contract was down 7 percent from last Friday’s intraday high of 26.13 cents per lb.

Friday’s data also showed speculators trimmed their net shorts in coffee and cocoa. Cocoa short positions dropped by a net 2,444 contracts to 18,892, offsetting the increase of the previous week, while their net short coffee position eased by 1,536 contracts to 19,008.

SUPPLEMENTAL     Non-Comm           Indexes              Comm        
                       Net     Chg       Net     Chg       Net     Chg
 Cocoa             -18,892   2,444    34,021  -1,025   -15,729  -2,702
 Sugar              82,956   2,286   243,109    -456  -358,173  -2,923
 Coffee            -19,008   1,536    38,021     435   -17,889  -2,005
 Cotton              3,266  11,050    67,390    -667   -75,356 -12,598
 =====================================================================

 FUTURES + OPTS    Managed             Swaps          Producer        
                       Net     Chg       Net     Chg       Net     Chg
 Cocoa              -3,489   1,859     5,633    -908    -2,481  -2,614
 Sugar             135,153   4,486    95,285    1216  -284,123  -5,204
 Coffee             -9,964   1,197    22,540     246   -12,863  -1,948
 Cotton               -948   9,972    46,789    -563   -68,660 -12,761

                     Other         NonReport              Open        
                       Net     Chg       Net     Chg  Interest     Chg
 Cocoa                -263     380       600   1,283   186,209   4,931
 Sugar              21,578  -1,591    32,108   1,093   894,283   7,676
 Coffee              1,410     469    -1,123      36   224,024   3,602
 Cotton             18,118   1,136     4,701   2,218   254,040   2,783
 =====================================================================

 FUTURES ONLY      Managed             Swaps          Producer        
                       Net     Chg       Net     Chg       Net     Chg
 Cocoa              -4,806   1,323     5,750  -1,008    -3,235  -2,797
 Sugar             142,719   8,941    99,801  -2,845  -269,129  -8,483
 Coffee            -10,681   1,025    23,812     398   -21,496  -1,102
 Cotton             -3,897   5,422    45,550    -350   -59,739  -7,894

                     Other         NonReport              Open        
                       Net     Chg       Net     Chg  Interest     Chg
 Cocoa               1,632   1,197       659    1285   171,898   3,492
 Sugar              -7,410     724    34,019    1663   746,727   8,078
 Coffee              9,731    -518    -1,366     197   154,900    -655
 Cotton             13,278     651     4,808    2171   189,215     491
 =====================================================================

Source: http://www.reuters.com/article/2012/03/30/cftc-softs-idUSL2E8EUA4E20120330

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