NEW YORK, Nov 2 (Reuters) - Cotton futures ended lower
Wednesday on speculative sales as worries over the protracted
euro zone debt crisis kept investors on the defensive, dealers
said.
The key December cotton contract on ICE Futures U.S.
dropped 1.20 cents or 1.2 percent to conclude at 98.34 cents
per lb, moving from 98 cents to $1.007.
Total volume traded Tuesday hit over 20,000 lots, over
one-third above the 30-day norm, preliminary Thomson Reuters
data and ICE Futures U.S. data showed.
On Friday, the contract ended at $1.0437 in the highest
settlement close for spot cotton in six weeks in initial
euphoria that the European debt crisis has been resolved.
But Greece's decision to put the bailout package to a vote
in a referendum deflated most financial markets due to worries
over a global recession and cotton is seemingly no exception.
'Cotton is going to share some of that pain,' said Sharon
Johnson, senior cotton analyst at commodities brokerage Penson
Futures in Atlanta.
Independent analyst Mike Stevens said cotton was also
seeing rolling of positions forward by index funds.
Traders said there was also some liquidation of positions
due to the failure of U.S. brokerage MF Global.
The market will be looking toward release of the weekly
export sales report from the U.S. Agriculture Department on
Thursday to gauge the pace of U.S. cotton export sales.
'I think some sales were done last week when the market
went down to the 96 cents area and we expect the Chinese in
there,' a dealer said of the world's top consumer of cotton.
Technically, dealers said the December contract may soon
take aim at the recent low of 96 cents hit last week and
possibly go toward 93 or even 90 cents further afield.
Open interest in cotton, usually taken as an indicator of
investor exposure in cotton, stood at 164,904 lots as of Nov 1,
its highest level since April 20, exchange data showed.
Total volume traded Tuesday in the cotton market reached
37,442 lots, from the previous tally of 25,331 lots, ICE
futures U.S. data reported.
