NEW YORK, May 26, 2010 (Dow Jones Commodities News via Comtex) -- Cotton prices ended mixed as traders moved from the nearby July contract to the less-expensive December.
Nearby cotton for July delivery settled down 0.23 cent, or 0.3%, at 81.84 cents a pound on ICE Futures U.S. The December contract ended up 0.78 cent, or 1%, at 78.93.
July cotton prices have been moving sideways in a range of 79-84 cents since May began. Buying from textile mills at lower levels supports prices as demand is expected to outstrip supply in the current season and the next. Traders are selling July, which represents cotton that is currently available, in favor of December, which represents cotton that will be available in the fall. There is more risk in the December contract as plantings are 60% completed but face the risks of summer weather.
Under those conditions, the spread, or difference in prices, between July and December has narrowed this week.
"Demand has been consistent, but so has the weather," said Rogers Varner Jr., president of Varner Brothers, a brokerage in Cleveland, Miss.
The July-December spread settled 1.01 cent lower Wednesday at 2.91 points.
Traders expect strong sales in weekly U.S. cotton export data scheduled for release at 8:30 a.m. EDT from the U.S. Department of Agriculture.
ICE daily cotton stocks increased by 7,596 500-pound bales Tuesday to total 1.075 million with 36,214 bales awaiting review and 2,706 decertification orders, according to exchange data.
ICE cotton open interest, which is the number of active positions left at the end of the session, decreased by 332 positions Tuesday to total 189,973, according to the exchange.
Volume was estimated at 18,064 lots. In options, approximately 5,179 calls and 4,954 puts traded on the floor, according to exchange data.
Close Change Range
Jly 81.84 -0.23 81.76-82.90
Oct 78.15 +0.62 78.09-78.48
Dec 78.93 +0.78 77.77-78.99