NY cotton down for 6th day, hit by outside markets

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* Cotton closes lower for 6th trading day in a row

* Cotton market awaits USDA supply/demand report Thursday

* Weekly export sales, shipments due at same time

NEW YORK, May 9 (Reuters) – U.S. cotton futures posted another five-month low on Wednesday as prices continued their descent, pulled down by selling in other commodity markets to their sixth straight lower close.

“The dollar’s up, crude oil’s down, gold is down, grains are down, the stock market is down. Why would anyone think cotton would be up?” said Jobe Moss of MCM Inc in Lubbock, Texas.

Moreover, on Thursday at 8:30 a.m. EDT (1230 GMT), the U.S. Department of Agriculture will issue its first crop outlook for the 2012/13 marketing season (August/July).

Many players have maintained a cautious stance ahead of the widely anticipated supply/demand report, giving sellers the upper hand with little opposition.

July cotton on the ICE Futures U.S. exchange finished down .36 cent, or 0.42 percent, at 85.82 cents per lb, after trading between 85.31 to 87.34 cents per lb.

The settlement price marked July cotton’s lowest close for a second-position contract since mid December, 2011, according to Thomson Reuters data. July volume came in at 14,341 lots.

New-crop December slipped .96 cent to close at 83.37 cents a lb. Prices spanned 82.84 to 85.09 cents during the session. December volume came to 5,961 lots.

USDA will come out with its first U.S. production estimate for the 2012/2013 season. Analysts said the forecast begins as a statistical calculation based on estimates for the crop yield, abandonment rate, March planting intentions, and other factors that USDA will fine tune as the year progresses.

After USDA’s report from last May showed a large discrepancy with actual results, Moss said he cannot guess what Thursday’s figures will be but is preparing for a negative outlook.

“I think the crop report will be negative. It was so negative last time that it would be hard for cotton to rally with those kinds of figures,” said Moss.

Last year, he pointed out, USDA’s May report predicted global consumption of 119.5 million bales. In last month’s report, it showed world demand at 107.6 million bales, well short of the original forecast with a 12 million bale miss.

Also on Thursday, analysts, on average, look for paltry weekly export sales of 40,000 running bales, with shipments healthy at 275,000 bales, a survey by Reuters showed.

While export sales have been negative for several weeks because of cancellations, analysts said the USDA’s annual export forecast has already nearly been met for old crop cotton.

Light showers forecast for U.S. cotton growing regions should continue to help the crop, while pressuring prices that were driven up, in part, by weeks of dry weather during planting season.

Wednesday’s estimated volume increased to 20,833 lots, about 27 percent below the 30-day average, according to Thomson Reuters data.

Cotton’s open interest rose by 695 lots to 184,764 lots as of May 8, ICE Futures U.S. exchange data showed.

(Reporting by Carole Vaporean; editing by Jim Marshall)

Source: http://www.reuters.com/article/2012/05/09/markets-cotton-idUSL1E8G9J2820120509

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