ICE futures U.S. cotton charged to a 16-month high Monday as strong
fundamentals sent funds in to buy the soft commodity, but selling late in the
session capped the highs.
Most-active March cotton settled at 76 cents, up 40 points on the day. The
contract traded as high as 76.77 cents--its highest level since Sept. 2008. May
cotton settled at 77.13 cents, up 54 points.
Traders said the cotton market remains in a strong technical uptrend where 77
cents remain the next area of resistance. "Cotton has supportive fundamentals
and fund money was pouring in and no one was interested in selling," said
Sterling Smith, market analyst at Country Hedging, of the market's moves
earlier in the day.
Despite the run-up in prices, traders noted grower selling near the highs to
cap the rally. Support for March cotton is seen at 74.25 cents with resistance
at 77 cents.
Weakness in the U.S. dollar against its major rivals backed the gains seen in
coffee and the bulk of the commodities complex. Better-than-expected December
U.S. ISM manufacturing data failed to push the dollar higher and a decline in
U.S. Treasuries further fueled the greenback's decline later in the session.
India's raw cotton exports tripled in the October-December quarter, and
Chinese demand is expected to maintain growth at a high level starting in
January.
India exported 1.5 million bales of 170 kilograms each in the
October-December period, compared with 549,642 bales in the same quarter a year
earlier, according to data from the Office of the Textile Commissioner.
However, shipments in December fell to 271,901 bales from 715,296 bales the
previous month, the data showed.
ICE Settle Change Range (at time of
settlement)
Mar 76.00 up 40 pts 75.67-76.77
May 77.13 up 54 pts 76.77-77.83
*ICE settlements in cents per pound