NEW YORK (Dow Jones)--ICE cotton futures ended higher in continued
consolidation Friday as the market plotted its next move after reaching
two-year highs earlier this week, and amid spillover buying from commodities on
bullish economic outlooks.
Most-active May cotton settled up 61 points, or 0.7% at 82.43 cents a pound.
For the week, futures are nearly unchanged, down just 0.03%.
Cotton futures have risen 20.8% in the last month, reaching their highest
levels since March 2008 on Monday. Weaker-than-expected production from major
producers and growing demand from textile mills eyeing economic recovery have
kept cotton prices relatively strong since mid 2009.
Cotton also found support from prospects for brighter economic outlooks in a
better-than-expected U.S. February jobs report, pushing prices for softs and
crude higher. Investors were more eager to buy on ideas the economy could grow.
Cotton prices will likely find strong support if they dip below 80 cents as
textile mills need to fix prices for and buy substantial quantities of cotton,
said Peter Egli, director of risk management at Plexus Cotton Lt. in Phoenix.
May's recent high at 84.60 could be a near-term top, said Boyd Cruel, senior
softs analyst at Vision Financial Markets in Chicago. The market is technically
overbought after such strong gains in a short timeframe, Cruel said, which
could lead to chart-based selling if futures settle below 81.50.
Traders are looking to Wednesday's U.S. Department of Agriculture cotton
supply and demand report scheduled for Wednesday for more fundamental cues.
ICE daily cotton stocks increased by 17,432 500-pound bales Thursday to total
618,420 bales, with 57,516 bales awaiting review and 1,221 decertification
orders, according to exchange data.
ICE cotton open interest--the number of active positions left at the end of
the session--increased by 1,776 positions Thursday to total 183,438, according
to the exchange.
Volume was estimated at 10,270 lots. In options, approximately 3,398 calls
and 2,485 puts traded, according to exchange data.
Close Change Range
Mar 82.53 +41 pts 81.46-83.17
May 82.43 +61 pts 81.77-83.12
Dec 75.09 +40 pts 74.54-75.19