NEW YORK, Oct 28 (Reuters) - U.S. cotton futures finished
lower Thursday on fund rolling-related sales, with pressure
from the process of moving positions out of the spot contract
seen pressuring the market into next week, analysts said.
The market shrugged off the impetus from stronger Chinese
cotton prices and the fall in the dollar. A weaker
greenback would normally give U.S. cotton contracts a boost.
'It's the index fund roll,' said Mike Stevens, an
independent cotton analyst in Louisiana.
'They (the index funds) are selling Dec(ember cotton
contract) and buying March and putting pressure on the market,'
he said.
The market had risen nearly 80 percent since the start of
its rally in July to an all-time record of $1.305 this week.
Over the last two days, cotton futures had dropped over 6
percent in value as the roll began in earnest.
ICE Futures U.S. key December cotton contract
dropped 1.91 cents to end at $1.2168 per lb, three ticks above
the day's low.
Total volume traded in cotton hit a hefty 56,404 lots at
2:53 p.m. EDT (1853 GMT), some 131 percent above the 30-day
average at 24,379 lots, Thomson Reuters preliminary data
showed.
In China, the Zhengzhou Commodity Exchange's benchmark May
cotton futures was last traded at 27,825 yuan per
tonne, up 705 yuan from the previous close.
Technically, the U.S. cotton market has moved off
overbought levels.
(Graphic:http://graphics.thomsonreuters.com/gfx1/AB_20102810141018.jpg)
Analysts said the cotton market remained fundamentally
bullish because of strong demand for the fiber, tight stocks
and the willingness of funds to keep investing in fiber
contracts because they believe it will remain firm.
For the first time in six weeks, the volume of U.S. cotton
export sales slowed down.
The U.S. Agriculture Department's weekly export sales
report showed total U.S. cotton sales at 300,800 running bales
(RBs, 500-lbs each), the first time it had fallen below 570,000
lots in over five months.