NEW YORK, Oct 19: NY cotton futures ended higher on Friday on forecasts for rain in some cotton-growing areas of the US South after recent severe storms.
Expectations that rain will move through parts of Texas and hit the Northern Delta this weekend helped lift cotton prices, traders said.
Anticipation of the rain moving into the Delta was supportive along with the idea that we’ll see a lower crop number, said one cotton broker.
The market still awaits definitive data on weather damage to US crops, which were hit with heavy rains in a recent tropical storm and a hurricane.
There’s a lot of cotton that is yet to be harvested and now a lot of that cotton is sitting out in the field getting ready to get wet, said one broker. And now more rain this weekend. It’s almost worst case scenario for a lot of those guys.
In Texas cotton-growing regions, Weather Services Corp. (WSC) forecast a rainy weekend.
December cotton closed 0.41 cent higher at 44.45 cents a lb, after trading from 43.75 cents to 44.65 cents.
March cotton gained 0.42 cent to finish at 46.72 cents. Back months ended up from 0.35 to 1.25 cents on Friday.
Friday’s final volume showed some modest increase in activity. Estimated volume for N.Y. cotton No. 2 was 8,443 lots, down from a slim 4,013 lots on Thursday. Open interest rose 677 lots to 72,416 lots.
There was light spec and trade buying early. The locals got long with that. Then, they bid up the market any time anybody came in to try to buy. You had a few bullish option plays. But no heavy volume on any of this, a dealer said.
Once the locals got long no one could come in and pressure the market. Most paper coming in was buy paper, he added.
After the market closed, the Commitment of Traders released its No. 2 cotton figures for the week ended Tuesday. The data showed that funds were net short 3,068 lots in the week, whereas specs ended the week net long 3,739 lots.
Shipments of 48,500 RBs for the week were 52 per cent below the previous week and 58 per cent under the four-week average.
The export sales were nothing to write home about, but they certainly did not pressure the market, said one trader.
Flanagan estimated support levels for December cotton were at 44.20, 43.80, 42.90, and 42.30 cents a lb. Resistance levels were cited at 44.90 cents, 45.40, and 46.0 cents a lb.—Reuters
