NEW YORK, April 6: NY cotton futures ended on Friday’s session mixed with the front month May and July contracts squeezing out modest gains, as the trade became good buyers late in the day, with little selling pressure, traders said.
We started out this morning with some really good volume, but it seemed to thin out as the day went on. The funds and specs were good sellers all day, but steady scale-down trade buying kind of goosed us up into the close, a floor trader said.
Key May cotton eked out a 0.01 cent gain to close at 37.73 cents a lb. Trade ranged from 37.45 to 37.89 cents.
It (May) closed above its mid-range for the day, so I think it ended the week on a slightly positive note, one floor source said.
July ended up 0.06 cent to 39.35 cents a lb.
The rest of the board lost 0.05 to 0.15 cents a lb.
The feature today was no feature. I mean, you had some fund selling with the trade buying on the dips, which kind of absorbed the selling, and that was it a broker in the US southeast said.
Cotton prices have largely been confined between 34-40 cents following its recovery from sell-offs to near 30-year lows in October 2001.
We’ve been stuck in this trading range for a while now. I think you’ll see the market take a little dip early next week, but then you’ll see it start back up again, said Jobe Moss of brokers and merchants MCM Inc. in Lubbock, Texas.
The market will be eagerly awaiting the batch of fundamental news coming out next week that may give futures a direction to move.
The USDA monthly supply/demand report comes out next Wednesday, as well as May options expiry next Friday.
John Flanagan of Flanagan Trading Corp. in North Carolina noted that the certified cotton stocks have been building in recent weeks and selling by a major merchant suggests that at least one of the major merchants is moving into position to deliver on the May contract.
Certified cotton stocks deliverable against New York Cotton Exchange’s No. 2 cotton futures contract as of April 4 totaled 238,700 bales, up from 237,367 bales the previous session.
First notice day for May cotton is April 24.
Flanagan believes the May cotton contract would face resistance at 39.00, then 39.80 cents, while support is seen at 37.50 cents and then in layers down to 36.70 cents.
Floor sources said estimated final volume stood at 6,500 lots, against the previous count of 7,475 lots.
Open interest, as of April 4, fell 372 lots to 64,360 lots.—Reuters
