NEW YORK (Dow Jones)--Cotton prices ended mixed Friday as the most-active
December contract slipped on technical sales.
December cotton settled 0.47 cent, or 0.6%, lower at 78.95 cents a pound.
Nearby cotton for July delivery settled 0.98 cent, or 1.2%, higher at 81.78
cents a pound on ICE Futures U.S. Open interest in July is very light as
traders with open positions in the contract begin next Thursday to post notices
to deliver and receive the physical commodity.
Cotton prices have risen 50% since last year as world textile demand
rebounds. For the current season ending July 31, world demand is expected to
outpace production by 13%, according to the U.S. Department of Agriculture.
Traders are concentrating on the fall harvest, represented by the December
contract. Demand is expected to remain strong, and the market is focused on how
textile mills will cope with tight supplies until new ones are available.
December is shying away from 80 cents under pressure from selling related to
producers locking in prices for the incoming harvest, said Peter Egli, director
of risk management at Plexus Cotton Ltd. in Phoenix.
Despite weakness, commercial traders are still interested in buying cotton,
said Andy Ryan, a risk management consultant at FCStone in Memphis.
"Merchant buying on the decline kept it from falling too far," Ryan said.
Traders are keeping U.S. weather conditions on their radar as the fate of the
upcoming crop hinges on the whims of Mother Nature. Conditions are favorable
for the developing crop in West Texas after beneficial rains earlier this week,
according to Meteorlogix, a private forecaster. A few light showers are
forecast this weekend across the state, which produces the most cotton in the
U.S.
Scattered showers and thunderstorms are forecast over the weekend for the
Southeast U.S. and Mississippi River Delta region, Meteorlgix says. Hotter,
drier weather there is depleting soil moisture for the developing crop,
particularly in Louisiana, according to the firm.
ICE daily cotton stocks decreased by 25,079 500-pound bales Thursday to total
741,649 with 21,239 decertification orders and 46 bales awaiting review,
according to exchange data.
ICE cotton open interest--the number of active positions left at the end of
the session--decreased by 2,220 positions Thursday to total 170,627, according
to the exchange.
Volume was estimated 14,052 lots. In options, approximately 832 calls and 689
puts traded on the floor, according to exchange data.
Close Change Range
Jly 81.78 +0.98 79.84-82.37
Oct 78.56 -0.60 77.96-79.19
Dec 78.95 -0.47 78.29-79.47