NEW YORK (Dow Jones)--Cotton prices ended mixed Wednesday as traders finished
business in the nearby futures contract and sold on technical cues in the
most-active month.
Nearby cotton for July delivery ended 1.99 cents, or 2%, higher at 84.45
cents a pound on ICE Futures U.S. The December contract settled 1.05 cents, or
1%, lower at 78.16 cents.
Cotton prices have moved sideways in a three-cent range for most of June.
But prices are up 62% from the same time last year as world economic recovery
has sparked a rebound in textile demand. Global demand is expected to outpace
production by 13% in the season that runs through July 31, and by 5% in the
year after.
July futures rose as traders rushed to position themselves ahead of the
physical delivery of the underlying cotton. Notices to take responsibility for
that cotton hedged against the July contract are issued beginning Thursday.
Traders who own long positions accept the cotton from those who own shorts.
As July rose, spread traders sold the December contract, which pushed it
below pre-set technical chart stops, said Mike Stevens, an independent cotton
broker and analyst based in Mandeville, La. Technical traders use price charts
to plot market trends. Selling near 80 cents is keeping December contracts
lower as cotton producers sell positions to hedge the crop they plan to harvest
in the fall.
The contract has technical support at the 78-cent level, said Tom Mikulski, a
senior market strategist at Lind Waldock in Chicago.
Traders are keeping a close eye on U.S. weather conditions with 62% of the
cotton crop rated as good or excellent in the week to June 20, according to the
U.S. Department of Agriculture.
ICE daily cotton stocks decreased by 4,877 500-pound bales Tuesday to total
524,475 bales with and 4,184 decertification orders, according to exchange
data.
ICE cotton open interest--the number of active positions left at the end of
the session--decreased by 1,228 positions Tuesday to total 165,148 as traders
rolled from July to December, according to the exchange.
Volume was estimated 18,976 lots. In options, approximately 1,539 calls and
314 puts traded on the floor, according to exchange data.
Close Change Range
Jly 84.45 +1.99 82.21-84.45
Oct 79.56 +0.17 78.04-80.57
Dec 78.16 -1.05 77.48-79.57