February 23, 2003	Sunday	Zul Hijjah 21, 1423

NEW YORK, Feb 22: NY cotton futures mostly higher on Friday, aided by a constructive weekly export sales report, but the market was preoccupied with record wide spreads and the disposition of March cotton before deliveries start.

Switching on the last day before first notice day on Monday took on special importance this month because of changes taking effect to cotton grade specifications from the March to the May contract.

Nearby March fell 0.75 cent to 50.57 cents a lb. Active May rose 0.53 cent to 57.59 cents, trading 57.10-57.65. Distant months ended up 0.25 to 0.60 cent, with December 2004 settling flat.

The March-May spread ballooned to 7.02 cents, the widest ever, from 5.74 cents on Thursday as longs liquidated or rolled.

As of Thursday, there were 5,881 contracts of open interest left in March out of a total of 89,884.

Anybody that’s holding March longs today could possibly get hit with delivery, said Jobe Moss of brokers MCM Inc. in Lubbock Texas. I feel pretty strong there’s going to be some significant notices issued.

Traders said there was concern about getting cotton that does not meet the grade and thus could not be redelivered later.

USDA said Friday that net export sales rose 205,700 (500-lb) running bales, one percent above 202,800 a week earlier and at the low end of trade estimates for 200,000-250,000 running bales.

The primary buyer was China. Shipments came in at 228,900 running bales, more than the 200,000-225,000 expected.

Today’s export sales report was good and shipments were excellent, said Flanagan Trading Corp. in its daily commentary.

Resistance in the May contract was seen at 58.10 with support pegged at 56.30.

Estimated volume on Friday was 19,000 contracts, according to traders, versus Thursday’s official 20,346.—Reuters