Cotton prices achieved a rare feat of closing the upper limit allowed by exchange limits on one day and falling the lower limit allowed the next – and set a record high in between.
Cotton for December, which ended the last session up the maximum allowed by New York's Ice exchange, added a further 4.3% in early deals on Friday to 119.80 cents a pound, approaching limit up again, and setting a record high for a near-term lot.
However, the contract then entered a decline which had dragged it by lunchtime to 109.87 cents a pound - so-called "limit down", the lowest price it could trade at on Friday under exchange rules - where it closed.
"This is very unusual," Hightower Report analyst Terry Roggensack told Agrimoney.com.
'Uncommon pattern'
The decline was all the more puzzling as the US earlier unveiled weekly export sales upland cotton at more than 560,000 bales, ahead of market forecasts of, at best, 500,000 bales.
Furthermore, Indian cotton dealers were reported to be seeking as much as 135 cents a pound for cotton, up from 120 cents a pound at the start of the month. India is keeping a tight rein on shipments, for fear of causing a domestic shortage which would stoke inflation.
Technically, cotton appeared less oversold than it had done previously in its rally, to judge by so-called relative strength index analysis, which compares upward with downward moves, Mr Roggensack said, with no surge in open interest levels.
"Usually when a commodity puts in a high, it adds another 20% or so. It has been the same in corn, soybeans, gold, you name it," he added.
"It is very uncommon to go up to a new high and then fall down."
'Weekend feeling'
A recovery in the dollar was cited for undermining a number of commodities on Fridaty, while a commodities investor Agrimoney.com in London spoke to cited a fallback in prices on China's Zhengzhou exchange as a potential spark for a round of profit-taking by cotton investors.
"Prices fell back late on from highs. That may have got a few people a bit jittery as to what would greet them when they got back to work on Monday," the investor said.
China has been at the root of the rally in New York futures, which have appreciated more than 40% this year, with the improved global economy boosting demand for textiles at a time when China's mills are suffering shortfalls in domestic supplies.
The China Cotton Association on Thursday issued its second downgrade in less than three weeks on China's crop, the world's biggest, and on Friday showed the country maintaining a pace of doubling cotton imports, year on year.
Foreign supplies have become price competitive, with cotton futures in Zhengzhou trading at the equivalent of about 170 cents a pound.
