ICE cotton dip as harvest pressure builds, end week little changed

ICE cotton dip as harvest pressure builds, end week little changed

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* Prices dip as harvest takes off

* December contract close to technically oversold

* Uncertainty fuels speculator selling

By Marina Lopes

NEW YORK, Oct 19 (Reuters) - New York cotton futures suffered their largest losses in nine sessions on Friday, as harvest pressures powered speculator selling.

The most-active December cotton contract on ICE Futures U.S. closed down 0.71 cent, or 0.8 percent, at 83.11 cents a lb, after hitting an intraday high of 84.40 cents.

"It was mostly spec buying earlier this week, but they weren't able to power this thing higher, so they turned around and sold," said Jack Scoville, analyst at the Price Futures Group.

Prices set a six-week low during the previous session.

Cash market activity was active throughout the week, as price dips stoked demand and left the December contract prices little changed on the week.

Expectations that the Federal Reserve will continue its monetary stimulus program following a 16-day budget battle in Washington pushed the dollar to an eight-and-half month low, while U.S. stocks resumed a record breaking climb.

Fiber underperformed the broader commodity market, as the Thomson Reuters-Jefferies CRB index gained 18 percent on the day.

The December contract's discount to March prices widened to 1.21 cent a lb from 1.13 cent previously, as certified stock levels have climbed.

A sudden injection of supplies has eased worries over tight nearby supplies in the United States, the world's top exporter.

Traders said they expect exchange inventories to grow to as many as 200,000 bales in the coming weeks.

Exchange stocks totaled 55,946 bales on Thursday, with another 48,780 bales awaiting review, the most recent ICE data showed, continuing their climb to the highest levels since August.

Further, traders' outlook for the U.S. crop now being harvest has brightened and added to the pressure.

The front-month contract crept close to being oversold with a 33 reading on the Relative Strength Index, as lack of information about the harvest kept investors on the sidelines.

On Thursday, the USDA announced it will not publish its monthly production report or estimate production numbers until early November, due to the government shutdown.

The Commitments of Traders report, typically due each Friday, will be delayed.

Uncertainty in the absence of key information in the aftermath of a partial U.S. government shutdown has left trading volumes light and investors wary during much of the past two weeks.

"When you don't know, you sell. Whether it's going short or getting on the sidelines, you just don't want to be long," said Ron Lawson, a partner at commodity investment firm LOGIC Advisors. (Reporting By Marina Lopes; Editing by Chizu Nomiyama)

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