* Market interpretation of USDA crop report mixed
* Weak stocks, grains put pressure on cotton
NEW YORK, April 10 (Reuters) – Cotton futures settled mixed on Tuesday as investors sifted through a U.S. government crop report for clear signals, while the weak tone of both the grains and stock markets pressured back months, dealers said.
The benchmark May cotton contract on the ICE Futures U.S. exchange rose 0.25 cent to finish at 89.73 cents per lb, dealing from 89.34 to 90.90 cents. The rest of the board traded lower.
Tuesday’s estimated volume reached almost 53,600 lots, which would be the highest since Nov. 15, 2011 when it hit 57,321 lots, ICE Futures U.S. and Thomson Reuters data showed.
The U.S. Agriculture Department’s monthly supply/demand report predicted world cotton stocks at the end of the 2011/12 marketing year on July 31 will stand at 66.07 million (480-lb) bales, up from 50.51 million bales in 2010/11, the biggest yearly rise in over 25 years.
While the figure looked bearish on the surface, the USDA data showed that India and China hold nearly half of the stocks, and cotton sitting in their warehouses would never be released to the market, analysts said.
“There is an element of disbelief” about the USDA report, said Keith Brown, president of commodity firm Keith Brown and Co. in Moultrie, Georgia.
The spot contract stayed in positive territory for most of the session while the back months trended lower.
Weighing on the cotton market was a weak grains complex that saw corn prices fall by 2 percent. Another negative was the slide in world stock prices on worries about slowing U.S. job growth.
Traders said the market was waiting to examine the USDA’s weekly export sales report on Thursday to gauge demand for U.S. cotton.
Open interest stood at 189,612 lots as of April 9, down from the 193,427 lots as of April 5, which was the largest number of open cotton futures contracts since Feb. 15, 2011, ICE Futures U.S. exchange data showed.
(Reporting by Rene Pastor; Editing by Alden Bentley)
Source: http://www.reuters.com/article/2012/04/10/markets-cotton-idUSL2E8FACMR20120410
