NEW YORK (Dow Jones)--ICE Futures U.S. cotton sank in a tide of speculative
selling that hit commodities Thursday as the dollar rallied.
March cotton settled down 83 points, or 1.2%, at 68.99 cents a pound.
General commodity liquidation weighed on markets across the board as
nervousness about the level of Greece's debt sent traders flooding into the
greenback and out of the euro, analysts said. Traders sold commodities as the
contracts are more expensive in other currencies when the dollar is strong.
Speculative traders, who have no use for the underlying commodity, sold their
long positions.
The weakness in other markets and the concerns about Greece influenced
financial markets and overshadowed otherwise bullish fundamental news for
cotton early in the day. Net U.S. cotton sales increased to 525,300 running
bales in the week to Jan 28, including a marketing-year high for the Upland
variety traded on ICE.
March cotton gave up any gains from Wednesday's firmer trade but managed to
stay above this week's low of 68.18 a pound, which was its lowest level since
mid-October.
Light commercial buying near the contract's psychological support level at 68
cents again staved off further losses Thursday, said Ron Lawson, managing
director at Logic Investment Services in California's Napa Valley.
Traders are on watch for more cues on dollar direction as a signal for U.S.
economic outlooks. They said the greenback will firm if January U.S. non-farm
payrolls data, scheduled to be released Friday at 8:30 a.m. EST, is considered
bullish.
Analysts said cotton traders are looking ahead to the National Cotton
Council's 2010 annual planting intentions survey estimate, scheduled to be
released after the market closes Friday.
ICE daily cotton stocks increased by 11,063 500-pound bales Wednesday to
502,230 bales with 52,180 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 429 positions Wednesday to total 171,187, according to
the exchange.
Volume was estimated at 19,657 lots. In options, approximately 7,065 calls
and 3,832 puts traded, according to exchange data.
Close Change Range
Mar 68.99 -83pts 70.05-68.22
May 70.50 -85pts 71.50-69.75