NEW YORK, Dec 7 (Reuters) - Cotton futures settled lower
Wednesday on light investor sales, after renewed worries over
the euro zone debt crisis and the market's inability to race
past topside resistance, analysts said.
U.S. stocks were down in choppy trading on Wednesday as
expectations that an EU summit could generate a deal to tackle
the region's debt crisis were deflated by a German official
discounting such hopes.
Key March cotton futures dropped 1.50 cents or
1.6 percent to finish at 92.31 cents per lb, after trading
between 91.75 and 93.80 cents. The range was very close to the
Tuesday trading band of 91.51 to 93.63 cents.
Volume traded Wednesday stood at around 8,400 lots, some
two-thirds under the 30-day average, according to ICE Futures
data.
Sharon Johnson, senior cotton analyst at commodities
brokerage Penson Futures, said commodity markets were all
pressured by fresh worries over euro zone debt and 'reacted
accordingly' by losing ground.
'Cotton hit (automatic computer) sell stop (orders) on the
way down,' she said.
The market, basis March, failed to surmount the technical
target around 94 cents, prompting technical players to sell off
the market later in the session.
The market will be turning its attention to the U.S.
Agriculture Department's weekly export sales report on Thursday
and then the USDA's monthly supply/demand report on Friday.
USDA is expected to reduce its estimate of U.S. 2011/12
cotton production and adjust its forecast of U.S. 2011/12
cotton exports.
USDA had forecast U.S. 2011/12 cotton production at 16.3
million (480-lb bales) in its November supply data, from 16.61
million bales in the preceding month. U.S. cotton exports were
forecast at 11.3 million bales, from 11.5 million bales.
Open interest in the cotton market, usually taken as an
indicator of investor exposure in the market, came to 139,821
lots on Tuesday, from the prior session's 139,061 lots,
exchange data showed.
Volume traded Tuesday reached 12,621 lots, from the prior
session's 10,239 lots, ICE Futures U.S. data reported.
