Cotton futures eked out marginal gains Monday on this last trading day of the month and year as talks continued in Washington over resolving the fiscal cliff.
Spot March hovered up 11 ticks to 74.77 cents at 7:59 a.m. CST, trading within a 103-point range between 74.65 and 75.68 cents on a contract volume of 2,211 lots. The market will close early for New YearΆs.
Markets are watching for the outcome of Washington negotiations to avoid going over the fiscal cliff and triggering massive tax hikes and spending cuts.
Dow Jones futures traded up 86 points and S&P futures up 12.50, while dollar index futures were nearly flat at up 0.030 79.815, crude oil fell 46 cents to $90.34, Brent crude dropped 87 cents to $109.75 and gold gained $7.20 to $1,662.10. Grains and soybeans traded lower.
ChinaΆs Zhengzhou cotton futures settled lower, down 80 yuan or 0.39% in January and 125 yuan or 0.65% in most-active May.
In the U.S. market, trend following funds bought 3,853 lots in cotton futures with options during the week ended Dec. 24 to increase their net long position by 16% to 27,740 lots, according to the latest traders-commitments data from the Commodity Futures Trading Commission.
Those funds covered more than eight times as many shorts as they added longs. Index funds sold a net 1,042 lots to reduce their net longs to 66,362 lots, while traders with non-reportable positions bought a net 925 lots to raise theirs to 5,793.
Commercials sold a net 3,736 lots, adding 4,385 shorts along with 649 longs to boost their net short position to 99,895 lots.
In the market Friday, March settled below its 18-day moving average and finished with a bearish weekly reversal to the downside. This spawned talk that the market may have formed a near-term top.
The May-July spread traded between premiums on July of 93 and 50 points and widened 31 points to close at 93 on a volume of 2,174 lots. May-July traded between premiums on July of 104 and 62 points and widened 25 points to settle at 102 on a volume of 1,077 lots, while JulyΆs discount to December widened 41 points to a settlement at 150 points.
In cash trading, grower-to-business sales slowed to 12,047 bales on The Seam from 14,362 bales the previous session. Prices fell to an average of 63.10 cents from 68.28 cents, reflecting a 14-point gain to 17.18 cents in premiums over loan repayments rates.
The sales included 1,393 bales of staples 35 or more and 1,724 bales of staples 34 or less, with 1,275 bales coming from the Southeast and 1,842 bales from the Southwest. Business-to-business trading was inactive.
