NEW YORK (Dow Jones)--ICE Futures U.S. cotton scraped eight-week lows Friday
amid spillover weakness from softer grains prices and selling related to the
firm dollar.
March cotton futures lost 1.13%, or 83 points, to settle at 72.08 cents a
pound. The May contract settled 89 points lower at 73.18.
Cotton moved in sync with weaker Chicago Board of Trade corn and soy as those
markets worked off pressure from bearish supply outlooks. Cotton often trades
in tandem with corn and soy as these crops compete via prices for acreage in
the upcoming spring planting season. The crops with the highest futures prices
tend to be planted in the most acres.
Agricultural commodities as well as metals and crude were weaker as the
dollar firmed Friday. Traders also moved back into the dollar to avoid risk
amid political uncertainties in Europe and a tighter economic policy in China.
Speculators, who have no use for the underlying commodity, sell futures when
the firm greenback makes them more costly.
March cotton fell to 71.93, the lowest point for the contract since Nov. 18.
However, futures recouped some losses and managed to settle above resistance at
72 cents a pound.
The market's current weakness is a good buying opportunity as prices are
expected to hold relatively firm through the first three-quarters of 2010, said
Peter Egli, director of risk management at Plexus Cotton Ltd. in Phoenix.
Mills are buying as cotton hits relative lows and cotton demand continues
strong with expectations for a rebounding economy, analysts said.
ICE Futures cotton trading is closed Monday.
ICE daily cotton stocks decreased by 1,632 500-pound bales Thursday to total
422,211 bales with 32,416 bales awaiting review and 2,992 decertification
orders, according to exchange data.
ICE cotton open interest – the number of active positions left at the
end of the session - decreased by 1,208 positions Thursday to total 181,154,
according to the exchange.
Volume was estimated 12,096 lots. In options, approximately 3,094 calls and
2,398 puts traded, according to exchange data.
Close Change Range
Mar 72.08 -83 pts 71.93-72.91
May 73.19 -83 pts 73.00-73.59
Dec 73.73 -58 pts 73.56-74.50